An Individual-Centered Compensation System

question 118

Multiple Choice

An individual-centered compensation system:

• A) focuses on employees' contribution and increases compensation based on the employee's ability to perform more duties successfully.
• B) assumes that the tasks being performed, and the contribution of those tasks to the company, provide the best criteria for setting the wage pay system.
• C) pays based on the number of hours during which the employees perform their assigned job.
• D) stresses the value and prestige of the job being performed.

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Definitions:

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, often with dividends that are paid out before those to common shareholders.

Capital Structure

The mix of a company's long-term debt, specific short-term debt, common equity, and preferred equity, which is used to finance its overall operations and growth.

Target Capital Structure

The optimal mix of debt, equity, and other securities a company aims to hold, balancing risk and return to maximise shareholder value.

Flotation Costs

Financial outlays a business faces when it issues new stocks, covering charges for underwriting, legal services, and registration documentation.