Top Management Does Not Need to Own a Significant Number

question 69

True/False

Top management does not need to own a significant number of shares in order to have the authority to exert great influence on the actions of a corporation.

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Definitions:

Preferred Stock

Stock with dividend priority over common stock, normally with a fixed dividend rate, often without voting rights.

Common Stock Dividends

Dividends that are paid to holders of a company's common stock, often from the company's profits.

Dividend Increases

An action by a company to increase the amount of dividends paid out to shareholders, usually as a result of increased profitability.

Cost of Equity

The return a firm theoretically pays to its equity investors, i.e., shareholders, as a reward for investing their capital.