What Is the Term for When Controlling Shareholders Pay Themselves

question 42

Multiple Choice

What is the term for when controlling shareholders pay themselves high salaries while not employing or not paying out dividends to noncontrolling shareholders?

• A)Quid pro quo
• B)Squeeze-out
• C)Collateral
• D)Liquidity

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Definitions:

Differential Costs

The difference in total costs between two alternatives, helping in decision-making processes where alternatives are being considered.

Sunk Costs

Costs that have already been incurred and cannot be recovered or altered by future actions.

Sunk Cost

Refers to money that has already been spent and cannot be recovered, which should not influence future business decisions.

Standard Cost Formula

A predetermined cost of manufacturing a single unit or a number of product units during a specific period under normal conditions, used for budgeting and cost control.