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:

Defamation

The act of communicating false statements about a person that injure the reputation of that person.

Business Interruption Insurance

An insurance that covers the loss of income a business suffers after a disaster related to closing its premises or the rebuilding process.

Property Damage

Damage to or destruction of physical property or its loss of use.

Revenue Losses

Financial losses incurred by a business, often as a result of decreased sales, lower pricing, or external factors affecting income.