BUS 100 Ch. 13 Quiz

Investors may receive an economic benefit from the ownership of stock by receiving

Interest, Dividends, and Capital Gain

The "agency problem" arises when:

Managers act in they own interest, rather than in the interest of the shareholders.

Social investors seek to eliminate from they investment portfolios companies that

Make dangerous products like tobacco or weapons, Pollute the environment, Discriminate against employees

Which of the following is not an instance of "insider trading?"

A marketing executive briefing stock analysts on the company's sales performance

Which of the following statement is not true about shareholders?

A. They are the legal owners of business corporations. B. They own equal shares of company assets c. Managers pay close attention to their needs and interests D. They are investors in the company. The Answer is B!

Which of the following is not a legal right of shareholders?

A. To vote on who will become CEO B. To vote on major mergers and acquisitions C. To vote on changes in the corporate charter and proposals. D. To vote on members for the board of directors The answer is A!

the board committee that administers and approves salaries and benefits of high-level managers in a company is called the:

Compensation Committee

Which of the following arguments supports the concept of high executive compensation?

High salaries provide an incentive for innovation and risk-taking.

The mission of the Securities and Exchange Commission (SEC) is to:

Protect shareholders' rights by making sure that stock markets are run fairly.

How are directors (members of a corporate board) selected?

Shareholders elect the directors from a list of candidates