The Pelz Effect Research Finds That Subordinates

question 29

Multiple Choice

The Pelz effect research finds that subordinates

• A)were more satisfied in their jobs when they felt their immediate supervisor had influence on decisions made at higher levels.
• B)prefer supervisors who treat them as equals.
• C)distrust supervisors who have personal relationships with other subordinates.
• D)are more likely to follow the direction of a supervisor who leads by example rather than by edict.

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Definitions:

Marginal Shareholder

An investor perceived to be influential in determining a stock's price by their decisions to buy or sell at the margin.

Common Stock

Shares of ownership in a corporation, giving holders voting rights and a dividend based on the company’s profitability.

Cost of Debt

The interest rate a company pays on its borrowings, often expressed as a percentage.

Cost of Equity

The return a firm theoretically pays to its equity investors, i.e., shareholders, to compensate for the risk they undertake by investing their capital.