When Corporate Governance Breaks Down

question 33

Multiple Choice

When corporate governance breaks down

• A)shareholders are unlikely to receive fair returns on their investments.
• B)managers may be tempted to enrich themselves at shareholder expense.
• C)the board of directors is not doing its job.
• D)all of the above

---

Definitions:

Profits

The financial gains obtained when revenues exceed the costs and expenses incurred to operate the business.

Total Costs

The sum of all costs incurred by a business in producing a certain amount of goods or services.

Variable Costs

Costs that change in proportion to the level of goods or services a business produces.

Fixed Costs

Costs that do not change with the level of production or sales, such as rent, salaries, or insurance premiums, providing stability in budget planning.