In Many Corporations, There Is "Separation of Ownership from Control

question 127

Multiple Choice

In many corporations, there is "separation of ownership from control." What does this mean?

• A)The shareholders control the corporation, although the board of directors owns the corporation.
• B)The managers of the corporation run the corporation, although the shareholders own the corporation.
• C)The board of directors controls corporate operations, although the managers of the corporation own the corporation.
• D)Top corporate managers only make decisions that have been approved unanimously by shareholders.

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Definitions:

Book Value

The net value of a company's assets minus its liabilities, as reported on the balance sheet, often used to assess a company's financial health.

Mortgage Payable

A long-term liability on a balance sheet, representing money owed on a property loan that is to be paid back over time.

Capital Balance

Capital balance represents the amount of capital attributed to the owners or shareholders of a company, reflecting their stake in the entity.

Partner Bonus

A financial incentive provided to a partner within a business, often based on the firm's profitability, individual performance, or both.