Why Are Tier-2 Costs Called 'Hidden' Environmental Costs

question 24

Multiple Choice

Why are Tier-2 costs called 'hidden' environmental costs?

• A) They are hidden in the accounts so that stakeholders are unaware of the potential environmental risks of the firm.
• B) They tend to be included in other accounts such as overhead and therefore are not easily identifiable.
• C) They are uncertain because it is not possible to show them in a separate account.
• D) Environmental costs cannot be estimated with any degree of certainty.

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Definitions:

Shareholder's Demand

A formal request by a shareholder, typically for corporate information or to take specific actions, under legal rights.

Court Piercing

A legal action where a court disregards the corporate entity and holds its owners personally liable for corporate debts or misconduct.

Derivative Action

A lawsuit brought by a corporation shareholder on behalf of the corporation against a third party.

Suing Shareholder

A stockholder who initiates a legal action against a corporation, often for actions that are believed to harm the company or its shareholders.