Why Do Shareholders Bear Most of the Risk of Running

question 15

Multiple Choice

Why do shareholders bear most of the risk of running a firm?

• A) They only have a residual claim on the firm's cash flows.
• B) They receive a salary from the company.
• C) They are guaranteed a fixed payout each quarter.
• D) Shares can be taken away at any time without notice.

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Definitions:

Pompous Language

The use of overly self-important or grandiose language intended to impress others.

Establishing Qualifications

The process of presenting and verifying credentials, skills, and experiences that make an individual suitable for a particular role or task.

Areas of Expertise

Specific fields or subjects where an individual or organization has extensive knowledge and skill.

Conversational Tone

Refers to a style of communication that is informal, friendly, and resembles a conversation between two people, often used to make written content more relatable.