Consider a Corporation That Was Originally 100% Family Owned

question 10

Multiple Choice

Consider a corporation that was originally 100% family owned.Which of the following statements is TRUE?

• A)Each time the company issues new shares family control may be reduced.
• B)If the family owns more than 50% of the shares they still have effective control of the firm.
• C)Even if the family owns less than 50% of the outstanding shares they may still retain effective control of the firm,especially if there are no other large shareholders.
• D)All of the above are true.

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Definitions:

Expenditure

The total amount of money spent by an individual, firm, or government on goods and services.

Innovation

The process of creating new methods, products, or ideas that bring about significant improvements or changes.

Diffusion

The process by which a new idea, product, or practice spreads through a population or society.

Creative Destruction

The continuous process of annihilating old and outdated business models or products to create new ones that benefit the economy.