A Typical 'Public' Company Has Many Types of Shareholders, from Individuals

question 80

Multiple Choice

A typical 'public' 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 shareholders are met?

• A)The decisions taken by the financial manager should be solely influenced by the benefit to the company since, by maximising its fitness, he or she will also maximise the benefits of that company to the shareholders.
• B)The financial manager should seek to make investments that do not harm the interests of the shareholders.
• C)In general, all shareholders will agree that they are better off if the financial manager works to maximise the value of their investment.
• D)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.

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Definitions:

Generate Alternatives

The process of developing multiple options or solutions to a problem or situation.

Preferences

Individual tendencies or choices toward certain options over others, often based on values, beliefs, or personal tastes.

Z Problem-Solving Model

A decision-making framework that alternates between analytical and intuitive thinking strategies.

Nonpreferences

Choices or options that are less desirable or not preferred by an individual or group when making decisions.