The Text Provides an Example of Stakeholder Power in the Investment

question 80

Multiple Choice

The text provides an example of stakeholder power in the investment banking industry.In 2007,the net income of the top five U.S.investment banks was roughly $10 billion.This sounds pretty good until you find out that in this same year the salary and bonuses paid to their employees was FOUR times that amount ($40B) .This is an example of what?

• A) Strong internal stakeholders capturing the value that would otherwise go to others (such as stockholders).
• B) Strong external stakeholders having an undue influence on managerial decisions inside the firm.
• C) Weak internal stakeholders not getting inducements commensurate with their contributions to the firm.
• D) In the end, all stakeholder groups are rewarded well if the firm is successful.

Appreciate the ethical concerns and insights derived from classic social psychology experiments.

Identify the factors that may increase or decrease conformity and obedience in different contexts.

Recognize the role of cultural influences on conformity and obedience behaviors.

Understand the factors influencing obedience and resistance to authority.

---

Definitions:

Quarterly Dividends

Dividends paid by a corporation to its shareholders at the end of each quarter of its fiscal year.

Stock Split

A corporate action where a company divides its existing shares into multiple shares, potentially making the stock more affordable for investors.

Trading Costs

Expenses associated with buying and selling financial instruments, including commissions, bid-ask spreads, and market impact costs.

Stock Split

A corporate action where a company divides its existing shares into multiple shares to boost the liquidity of the shares, though the overall value of the shares remains the same.