Exam 13: Corporate Governance and Ethics

Identify a true statement about fiduciary duties.

TinyToys Inc. is a company that manufactures toys. Which of the following would be its secondary stakeholder?

How did the general-purpose corporations formed in the twentieth century grow?

________ is best described as the processes and structures that provide the ultimate decision making authority for a firm.

Which of the following statements is true of the agency problem facing the modern public corporation?

RedMart Corp. operates a chain of supermarkets. The managers and other employees of the company have been on strike for months due to their differences with its owners. As a result, the share price of the company has fallen drastically. Pro Investments Inc. purchases a majority of the shares of RedMart, confident that it can manage the company better. The problem faced by RedMart Corp. as result of the separation of ownership and control can be termed as a(n)_________.

Fatima wants to start a small business. She does not want to share the profits of her business with anyone else. In this scenario, Fatima should most likely opt for which of the following types of business ownership?

________ is a model of the corporation suggesting that a firm is the sum total of its contracts with different stakeholders.

ShopEazy Inc. operates a chain of supermarkets. The managers and employees of the company have been on strike for months due to their differences with its owners. As a result, the share price of the company has fallen to a historic low. Zeltro Investments decides to purchase a majority of ShopEazy's shares, confident that it can manage the company better. In this scenario, Zeltro Investments can be best categorized as a(n)________.

Chemica Corp. is a company that manufactures household chemicals and fertilizers used in farming. The government of the state in which it operates will be affected by the business through the _________.

___ are those values that define for an individual, group, or society things that are morally right or wrong.

A ___ is a formal declaration of a company's core values, business objectives, and ethical aspirations.

Jiao, a student of business management, claims that the shareholder primacy model is better than the stakeholder model of business management. Which of the following statements best supports her claim?

The ________ of a corporation have a legal fiduciary duty to act in the best interests of the corporation's owners.

________ is the right to buy a certain number of the corporation's shares at a specified future date for a specified price.

Explain the difference between the shareholder primacy model and the stakeholder model.

Antonia owns and runs a bakery in her neighborhood. She is the only person responsible for the liabilities of her bakery. Her bakery is an example of a(n)________.

Briefly describe agency problems. How can they destroy value in an organization?

HMR Inc. is a company that manufactures household chemicals and fertilizers used in farming. Its customers consist of farmers and other people who purchase its products. Its suppliers will be most affected by the business through the ________.

Identify a feature of the stakeholder model.