The Three Major Functions of Business Organizations

question 15

Multiple Choice

The three major functions of business organizations:

• A)Are mutually exclusive
• B)Function independently of each other
• C)Interface with each other
• D)Do not interface with each other
• E)Both b and c

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Definitions:

Future

Financial contracts obligating the buyer to purchase an asset or the seller to sell an asset, such as a physical commodity or a financial instrument, at a predetermined future date and price.

Clientele Effect

The theory that a company's stock price changes according to the demands and preferences of its existing shareholder base.

Dividend Policy

A company's approach to distributing profits back to its shareholders through dividends.

Capital Gains

The increase in value of an asset or investment over its purchase price, which becomes realized upon the sale of the asset.