Failure to Understand the Beliefs and Expectations of Stakeholders

question 9

Multiple Choice

Failure to understand the beliefs and expectations of stakeholders:

• A) Causes a company's profits to increase in the short run.
• B) Causes a company's profits to decrease in the short run.
• C) Causes the performance-expectations gap to grow larger.
• D) Increases the chance of a corporate buy-out.

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Definitions:

Extra Money

Extra money refers to funds that are available beyond what is needed for regular expenses, savings, or immediate commitments.

Dividend Payout Ratio

A financial metric that shows what portion of a company's net income is distributed to shareholders in the form of dividends.

Tax Rate

The tax rate is the percentage at which an individual or corporation is taxed, which can vary based on income, value of goods, and other factors.

Debt Financing

Raising capital through borrowing, typically via loans or by issuing bonds, which must be repaid with interest.