The Board Met and Agreed to Some Changes in Operating

question 61

Multiple Choice

The Board met and agreed to some changes in operating procedures and performance benchmarks.This new policy must now be communicated to their subordinates and disseminated throughout the company.What kind of communication is involved when information flows from those higher up in an organization to those of lower rank?

• A) downward
• B) upward
• C) horizontal
• D) outward

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Definitions:

Organization Expenses

Costs associated with the formation and setup of a company, including legal fees, incorporation fees, and promotional expenses.

Common Stock

A type of security that represents ownership in a corporation, with voting rights and the potential for dividends.

Articles of Incorporation

A document filed with a government body to legally document the creation of a corporation; synonymous with Corporate Charter but varies by jurisdiction.

Dividend Yield

A financial ratio that shows how much a company pays out in dividends each year relative to its stock price, indicating the earnings investors are making from dividends.