Explain why the willingness to purchase stocks is influenced heavily by shareholders' legal rights with respect to control of the corporation.
What will be an ideal response?
Shareholders' legal rights include the ability to elect and dislodge the board of directors of a corporation. The board can also dislodge managers and officers who are performing poorly. The ability of stockholders to influence these choices enhances the attractiveness of owning shares and therefore increases the willingness of individuals to purchase stocks.
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Betty consumes good x and good y. If the price of x = $3 and the price of y = $4, then
A) an extra unit of x costs 4/3 units of y. B) an extra unit of y costs 4/3 units of x. C) an extra unit of x costs 3/4 units of y. D) Both B and C.
All other things held constant, lower marginal (income) tax rates
A) necessarily increase tax revenues. B) necessarily decrease tax revenues. C) decrease the attractiveness of productive activities relative to leisure and tax- avoidance activities, and shift the SRAS curve rightward. D) do not affect the attractiveness of productive activities relative to leisure and tax- avoidance activities and therefore the SRAS does not shift rightward or leftward. E) increase the attractiveness of productive activities relative to leisure and tax- avoidance activities and shift the SRAS curve rightward.
Which of the following marketing pieces takes the concept of marginalism into account?
A) If a company's gross revenues are declining, it should increase its spending on advertising. B) Computers, monitors and other technical equipment in local dumps are causing $1 million dollars in environmental damage. Vote yes to allocate $100,000 in cleanup spending. C) Help save the manatees. Contribute to the campaign to raise $10,000. D) Contribute $50 annually to the Heifer Foundation and give a chicken to a family living in poverty. This gift will help generate an additional $100 in household income through the sale of the eggs produced.
A tax that takes a larger proportion of income from low-income groups than from high-income groups is a:
A. stabilizing tax. B. regressive tax. C. proportional tax. D. progressive tax.