A Typical Company Has Many Types of Shareholders,from Individuals Holding

question 58

Multiple Choice

A typical company has many types of shareholders,from individuals holding a few shares,to large institutions that hold very large numbers of shares.How does a financial manager ensure that the priorities and concerns of such disparate stockholders are met?

• A)The financial manager should seek to make investments that do not harm the interests of the stockholders.
• B)The decisions taken by the financial manager should be solely influenced by the benefit to the company since,by maximizing its fitness,he or she will also maximize the benefits of that company to the shareholders.
• C)The financial manager should consider the interests and concerns of large shareholders a priority,so the needs of those who hold a controlling interest in the company are met.
• D)In general,all shareholders will agree that they are better off if the financial manager works to maximize the value of their investment.
• E)The financial manager will consider the priorities of all the shareholders at the annual shareholders' meeting.

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Definitions:

Western Electric

A historical American electrical engineering and manufacturing company that played a significant role in the development and growth of the telecommunications industry.

Human Relations Theory

A concept in management emphasizing the importance of social processes in the workplace, including communication and employee needs, for enhancing productivity.

Wagner Act

A foundational piece of U.S. labor law enacted in 1935 that established the rights of workers to form unions and engage in collective bargaining.

Theory Y

A management notion that assumes employees are inherently motivated and enjoy their job duties.