Why Do Shareholders Bear Most of the Risk of Running

question 81

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:

Leadership Style

The way in which leadership is enacted, plans are carried out, and motivation is provided to people.

Theories

Systematically organized principles or explanations for phenomena or behaviors, often serving as a basis for predictions.

Best Leadership

The most effective form and practice of guiding individuals or groups towards achieving a common goal.

Young Managers

Refers to individuals in managerial positions who are relatively young in age, often facing unique challenges and opportunities.