Practice Test: IB Business And Management- Business Organisation & Environment #1.4

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    ​The local community are external stakeholders.

    • True
    • False
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Practice Test: IB Business And Management- Business Organisation & Environment #1.4 - Quiz

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  • 2. 

    The government is an external stakeholder.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    The government is considered an external stakeholder because it is an entity outside of the organization that can have an impact on its operations and decisions. The government can regulate the organization through laws and regulations, impose taxes, provide incentives or subsidies, and influence policies that affect the organization's industry or sector. As an external stakeholder, the government's actions and decisions can significantly impact the organization's performance and strategic direction.

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  • 3. 

    Managers are internal stakeholders in an organisation.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    Managers are considered internal stakeholders in an organization because they are directly involved in the day-to-day operations and decision-making processes. They have a vested interest in the success of the organization and are responsible for managing resources, implementing strategies, and achieving organizational goals. As internal stakeholders, managers play a crucial role in shaping the direction and performance of the organization.

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  • 4. 

    Directors are internal stakeholders in an organisation.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    Directors are considered internal stakeholders in an organization because they hold positions of authority and responsibility within the company. They are typically involved in making important decisions, setting strategic goals, and overseeing the operations of the organization. As internal stakeholders, directors have a direct impact on the company's performance and are invested in its success. They also have access to sensitive information about the organization and its activities, making them key players in shaping its direction and ensuring its long-term viability.

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  • 5. 

    Competitors are external stakeholders.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    Competitors are considered external stakeholders because they are entities or individuals outside of the organization who directly or indirectly compete with the organization for resources, customers, or market share. They can have a significant impact on the organization's success or failure and are therefore important to consider when making strategic decisions.

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  • 6. 

    Employees are internal stakeholders in an organisation.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    Employees are considered internal stakeholders in an organization because they are directly involved in the day-to-day operations and are affected by the decisions and outcomes of the organization. As internal stakeholders, employees have a vested interest in the success of the organization and can contribute to its goals and objectives. They have a direct impact on the organization's performance and are often involved in decision-making processes. Therefore, it is accurate to say that employees are internal stakeholders in an organization.

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  • 7. 

    _______________: The people who own shares in a private or public limited company; i.e. they are the part owners of a company

    Correct Answer
    Shareholders
    Explanation
    The term "shareholders" refers to individuals who own shares in a private or public limited company. By owning shares, they become part owners of the company. Shareholders have a financial stake in the company's success and are entitled to certain rights, such as voting on important decisions and receiving dividends. They bear the risk of potential losses but also have the potential to earn profits if the company performs well. Therefore, shareholders play a crucial role in corporate governance and have a vested interest in the company's performance.

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  • 8. 

    ​The local community are internal stakeholders.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    The local community is considered an external stakeholder rather than an internal one. Internal stakeholders typically include individuals or groups within the organization, such as employees, managers, and shareholders. On the other hand, external stakeholders are individuals or groups outside the organization who are affected by its actions, such as customers, suppliers, and the local community. Therefore, the correct answer is false as the local community is an external stakeholder.

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  • 9. 

    _________________ are stakeholders, but stakeholders are not necessarily _______________.

    Correct Answer
    shareholders
    stockholders
    Explanation
    Shareholders and stockholders are both stakeholders in a company because they hold ownership in the company through owning shares or stocks. However, not all stakeholders are shareholders or stockholders. Stakeholders can include employees, customers, suppliers, and the local community, who have an interest in the company's success but may not have direct ownership. Therefore, while shareholders and stockholders are stakeholders, the reverse is not always true.

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  • 10. 

    ​Special interest groups are external stakeholders.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    Special interest groups are external stakeholders because they are organizations or individuals who have a specific interest or concern in a particular issue or industry, but are not directly involved in the day-to-day operations of the organization. They often advocate for their interests and try to influence the decisions and policies of the organization. As external stakeholders, they have the potential to impact the organization's reputation, operations, and success. Therefore, the statement that special interest groups are external stakeholders is true.

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  • 11. 

    ​Customers are external stakeholders.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    Customers are individuals or entities who purchase goods or services from a company. As external stakeholders, they have a direct impact on a company's success and profitability. They provide revenue to the company and their satisfaction is crucial for the company's reputation and growth. Therefore, it is correct to say that customers are external stakeholders.

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  • 12. 

    Competitors are internal stakeholders.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    The statement "Competitors are internal stakeholders" is false. Competitors are actually external stakeholders. Internal stakeholders refer to individuals or groups within an organization who have a direct interest or involvement in its activities, such as employees, managers, and shareholders. On the other hand, competitors are entities or organizations that operate in the same industry or market and compete for the same customers, resources, and market share. They are considered external stakeholders as they have an indirect impact on the organization's performance and success.

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  • 13. 

    The government is an internal stakeholder.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    The government is not considered an internal stakeholder because it is an external entity that interacts with the organization but does not have a direct internal role or interest in its operations. Internal stakeholders typically include employees, managers, shareholders, and other individuals or groups directly involved or affected by the organization's activities.

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  • 14. 

    Employees are external stakeholders in an organisation.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    Employees are not external stakeholders in an organization because they are directly involved in the day-to-day operations and are considered internal stakeholders. External stakeholders are individuals or groups outside the organization, such as customers, suppliers, shareholders, and the community, who have an interest or are affected by the organization's activities.

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  • 15. 

    Managers are external stakeholders in an organisation.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    Managers are not external stakeholders in an organization because they are part of the internal structure and hierarchy of the organization. They hold positions of authority and are responsible for overseeing and directing the activities of employees. External stakeholders, on the other hand, are individuals or groups outside of the organization who have an interest or are affected by the organization's actions, such as customers, suppliers, shareholders, and the local community.

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  • 16. 

    Directors are external stakeholders in an organisation.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    Directors are not considered external stakeholders in an organization because they are part of the internal management team. They are responsible for making strategic decisions and overseeing the operations of the organization. External stakeholders, on the other hand, are individuals or entities that have an interest or are affected by the organization's activities but are not directly involved in its management.

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  • 17. 

    Shareholders are stakeholders in an organisation.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    Shareholders are individuals or entities that hold shares or ownership in a company. As stakeholders, they have a financial interest in the organization's success and are directly affected by its performance. Shareholders have the right to vote on important company matters and may receive dividends or capital gains from their investments. Therefore, it is accurate to say that shareholders are stakeholders in an organization.

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  • 18. 

    Suppliers are external stakeholders.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    Suppliers are considered external stakeholders because they are individuals or organizations that provide goods or services to a company but are not directly involved in its day-to-day operations. They have a vested interest in the company's success as it directly affects their own business. Suppliers play a crucial role in the supply chain and can impact the company's ability to deliver products or services to customers. Therefore, it is important for companies to maintain good relationships with their suppliers and ensure effective communication and collaboration.

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  • 19. 

    Which of the following is not an internal stakeholder of the Industrial and Commercial Bank of China (ICBC)?

    • The management

    • The shareholders

    • The Chinese government

    • The hourly-waged staff at ICBC

    Correct Answer
    A. The Chinese government
    Explanation
    The Chinese government is not an internal stakeholder of the Industrial and Commercial Bank of China (ICBC) because it is an external entity that has regulatory control and oversight over the bank. Internal stakeholders typically include individuals or groups directly involved in the operations and decision-making processes of the organization, such as management, shareholders, and employees.

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  • 20. 

    ​Suppliers are internal stakeholders.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    Suppliers are external stakeholders rather than internal stakeholders. Internal stakeholders typically refer to individuals or groups within the organization, such as employees, managers, or shareholders, who have a direct interest and influence in the organization's operations and outcomes. On the other hand, suppliers are external entities that provide goods or services to the organization, making them part of the external stakeholder group. They play a crucial role in the supply chain and can impact the organization's performance and success.

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  • 21. 

    ​Customers are internal stakeholders.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    The statement is false because customers are actually external stakeholders. Internal stakeholders refer to individuals or groups within an organization, such as employees, managers, or shareholders, who have a direct interest and influence in the organization's operations and decisions. On the other hand, customers are individuals or organizations outside of the company who purchase or use its products or services. They are considered external stakeholders as their actions and preferences can significantly impact the success and profitability of the organization.

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  • 22. 

    Shareholders are internal stakeholders in an organisation.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    Shareholders are individuals or entities that own shares or stocks in a company, making them partial owners of the organization. As internal stakeholders, shareholders have a direct interest and influence in the company's operations, decision-making processes, and financial performance. They have the right to vote on important matters affecting the company and can potentially benefit from the company's profits through dividends or capital appreciation. Therefore, it is correct to say that shareholders are internal stakeholders in an organization.

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  • 23. 

    External stakeholders include

    • Customers

    • Shareholders

    • Employees

    • Directors

    Correct Answer
    A. Customers
    Explanation
    External stakeholders are individuals or groups outside of an organization who have an interest or influence on its operations and success. In this case, customers are considered external stakeholders because they are directly impacted by the organization's products or services. Customers play a crucial role in the success of a business as they provide revenue and drive demand for the organization's offerings. Therefore, understanding and meeting the needs of customers is essential for maintaining positive relationships and achieving business objectives.

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  • 24. 

    Shareholders are ____________, but shareholders are not necessarily _____________.

    Correct Answer
    stakeholders
    Explanation
    Shareholders are individuals or entities who own shares in a company and have a financial interest in its success. They are considered stakeholders because their ownership gives them a stake or claim in the company's performance and profitability. However, not all stakeholders are shareholders. Stakeholders can include employees, customers, suppliers, and the local community, who have an interest in the company's activities and outcomes but may not have direct ownership.

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  • 25. 

    _____________ : People or groups of people who can be affected by, and therefore have an interest in, any action by an organisation

    Correct Answer
    Stakeholders
    Explanation
    Stakeholders refer to individuals or groups who may be impacted by the actions of an organization and therefore have a vested interest in its outcomes. These can include employees, customers, shareholders, suppliers, and even the local community or government. Stakeholders have the potential to influence or be influenced by the organization's decisions, making it crucial for organizations to consider their needs and concerns when making strategic choices.

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  • 26. 

    ___________________: These stakeholders do not form part of the organisation but have a direct interest or involvement in the actions of the organisation. Examples include customers, suppliers and the government

    Correct Answer
    External stakeholders
    Explanation
    External stakeholders are individuals or entities that are not part of the organization but have a direct interest or involvement in its actions. They can include customers, suppliers, and the government. These stakeholders are affected by the organization's decisions and activities and can have an impact on its success or failure. It is important for organizations to consider the needs and expectations of external stakeholders in order to maintain positive relationships and achieve their goals.

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  • 27. 

    _________________: These stakeholders are members of the organisation; i.e. the employees, the shareholders (who own the business), managers and directors of a business

    Correct Answer
    Internal stakeholders
    Explanation
    Internal stakeholders refer to individuals or groups within an organization who have a direct interest or involvement in its operations, success, and outcomes. They include employees, shareholders, managers, and directors. These stakeholders are considered internal because they are part of the organization and have a vested interest in its performance and profitability. They often have decision-making authority or influence over the organization's strategic direction and are directly affected by its actions and decisions.

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  • 28. 

    What arises because an organisation cannot meet the needs of all its stakeholders at the same time?

    • Conflict

    • Miscommunication

    • Mismanagement

    • Lobbying

    Correct Answer
    A. Conflict
    Explanation
    Conflict arises because an organization cannot meet the needs of all its stakeholders at the same time. This is because different stakeholders have different interests, priorities, and expectations. When these interests clash, it leads to conflict as the organization struggles to balance and satisfy the diverse needs of its stakeholders. Conflict can arise due to competing goals, limited resources, power struggles, or differing opinions on how the organization should operate. Resolving these conflicts requires effective communication, negotiation, and compromise to find mutually beneficial solutions.

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  • 29. 

    Shareholders are external stakeholders in an organisation.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    Shareholders are not external stakeholders in an organization. They are actually considered internal stakeholders as they hold ownership in the company by owning shares of its stock. External stakeholders, on the other hand, are individuals or entities that have an interest in the organization but do not have direct ownership, such as customers, suppliers, and the community. Therefore, the correct answer is False.

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  • 30. 

    Which of the following stakeholder groups is classified as an external stakeholder?

    • Owners or shareholders

    • Employees

    • Executive directors

    • Creditors

    Correct Answer
    A. Creditors
    Explanation
    Creditors are classified as external stakeholders because they are individuals or organizations that lend money or extend credit to a company. They have a financial interest in the company's operations and are not directly involved in its day-to-day activities or decision-making processes. Unlike owners or shareholders who have ownership rights and employees who work for the company, creditors are external to the organization and their relationship is primarily based on financial transactions.

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  • 31. 

    Internal stakeholders include

    • Stockholders

    • Creditors

    • Debtors

    • Competitors

    Correct Answer
    A. Stockholders
    Explanation
    Internal stakeholders refer to individuals or groups within a company who have a direct interest or influence in the organization's activities and outcomes. Stockholders, also known as shareholders or equity holders, are individuals or entities that own shares or stocks in a company. As owners, stockholders have a financial stake in the company's success and are considered internal stakeholders. They have the right to vote on important matters, receive dividends, and participate in the company's decision-making processes. Therefore, stockholders are correctly identified as internal stakeholders in this context.

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  • 32. 

    ​Special interest groups are internal stakeholders.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    Special interest groups are not internal stakeholders. Internal stakeholders typically refer to individuals or groups within an organization who have a direct interest or involvement in its activities, such as employees, managers, and shareholders. Special interest groups, on the other hand, are external stakeholders who advocate for specific causes or issues and may include organizations or individuals who are not directly affiliated with the organization. Therefore, the statement that special interest groups are internal stakeholders is false.

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  • 33. 

    Which of the following is a special interest group?

    • Employees

    • Directors

    • Local community

    • Suppliers

    Correct Answer
    A. Local community
    Explanation
    A special interest group is a group of individuals who share a common interest or goal and work together to promote or advocate for that interest. In this context, the local community can be considered a special interest group as they often come together to address issues and concerns that affect their specific community. They may lobby for changes in local policies, advocate for community development projects, or work towards improving the overall well-being of their community.

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  • 34. 

    Stakeholders are

    • People who can influence the behaviour of businesses

    • Individuals, groups or organisations that are affected by the behaviour of business

    • All those parties directly working for an organisation and are affected by its actions

    • The people or organisations that own shares in the business

    Correct Answer
    A. Individuals, groups or organisations that are affected by the behaviour of business
    Explanation
    Stakeholders are individuals, groups or organizations that are affected by the behavior of a business. This means that stakeholders can include customers, employees, suppliers, government agencies, and the local community, among others. They have a vested interest in the success of the business and can influence its behavior through various means such as purchasing decisions, advocacy, or regulation. The behavior of a business can have a direct impact on stakeholders, whether it is through its products or services, employment practices, environmental impact, or social responsibility. Therefore, it is important for businesses to consider the interests and needs of their stakeholders in order to maintain positive relationships and long-term success.

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  • 35. 

    How do pressure groups primarily strive to achieve their aims?

    • By raising as much publicity and awareness of their cause as possible

    • By lobbying the government for changes in the law

    • By organising mass demonstrations to win public support

    • By getting the workforce to take industrial action

    Correct Answer
    A. By raising as much publicity and awareness of their cause as possible
    Explanation
    Pressure groups primarily strive to achieve their aims by raising as much publicity and awareness of their cause as possible. This allows them to gain public support and put pressure on the government to make changes in the law. By generating attention and raising awareness, pressure groups can influence public opinion and create a sense of urgency around their cause, increasing the likelihood of achieving their goals. Lobbying the government, organizing mass demonstrations, and getting the workforce to take industrial action are also tactics that pressure groups may use, but they are secondary to the primary strategy of raising publicity and awareness.

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  • 36. 

    Stakeholders are shareholders in an organisation.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    The statement is false because stakeholders and shareholders are not the same. Shareholders are individuals or entities that own shares of a company's stock, while stakeholders are individuals or groups who have an interest in or are affected by the actions and decisions of a company. Stakeholders can include employees, customers, suppliers, creditors, and the local community, in addition to shareholders.

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  • 37. 

    Stakeholders, such as customers and employees, of a socially responsible firm may want the business to donate money to charity. Shareholders of the same firm may not necessarily agree witht his since it comes from their potential dividends. This is an example of

    • Compliance costs

    • Shareholder compliance

    • Shareholder conflict

    • Stakeholder divergence

    Correct Answer
    A. Shareholder conflict
    Explanation
    The given scenario describes a situation where stakeholders, such as customers and employees, have a desire for the socially responsible firm to donate money to charity. However, shareholders may not agree with this decision since it would reduce their potential dividends. This conflict between the interests of the stakeholders and the shareholders represents a shareholder conflict.

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  • 38. 

    Boycotting is often used by pressure groups to

    • Push governments to introduce legislation desired by the pressure group

    • Create adverse publicity for a business by advocating customers avoid the business

    • Prevent employees from being able to attend work

    • Taking a business to court for its socially undesirable behaviour

    Correct Answer
    A. Create adverse publicity for a business by advocating customers avoid the business
    Explanation
    Boycotting is a strategy commonly employed by pressure groups to create adverse publicity for a business by encouraging customers to avoid it. By organizing a boycott, pressure groups aim to negatively impact the reputation and profitability of a business, ultimately pressuring them to change their practices or policies. This method relies on the power of public opinion and consumer behavior to influence the targeted business.

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  • 39. 

    Which of the following stakeholders is least likley to be an external stakeholder?

    • General public

    • Government

    • Trade unions

    • Competitors

    Correct Answer
    A. Trade unions
    Explanation
    Trade unions are least likely to be considered external stakeholders because they are typically internal stakeholders. Trade unions represent the interests of the employees within a company or industry, advocating for their rights and negotiating on their behalf. They have a direct relationship with the organization and are involved in internal matters such as labor negotiations and employee welfare. In contrast, external stakeholders like the general public, government, and competitors have indirect relationships with the organization and are influenced by its actions but are not directly involved in its internal affairs.

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  • 40. 

    _____________: The view that businesses and their managers have responsibilities to a wide range of groups, not just shareholders

    Correct Answer
    Stakeholder concept
    Explanation
    The term "Stakeholder concept" refers to the belief that businesses and their managers have responsibilities to various groups beyond just shareholders. This concept recognizes that businesses should consider the interests and well-being of all individuals and entities that are affected by their actions, including employees, customers, suppliers, communities, and the environment. It emphasizes the importance of taking a broader perspective and making decisions that benefit all stakeholders, rather than solely focusing on maximizing profits for shareholders.

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  • 41. 

    A business might want to become involved in community projects even though there are not necessarily any direct financial gains from doing so. Which option below does not provide a reason for doing this?

    • The subsequent press coverage it might attract

    • To enhance the image of the business

    • To boost staff morale and motivation

    • For staff professional development

    Correct Answer
    A. For staff professional development
    Explanation
    Getting involved in community projects can provide various benefits for a business, such as enhancing its image, boosting staff morale and motivation, and attracting press coverage. However, staff professional development does not directly relate to community projects. While community involvement can indirectly contribute to staff professional development by promoting teamwork and leadership skills, it is not the primary reason for a business to engage in such projects.

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  • 42. 

    An organisation of individuals who unite to further their common interest is known as a

    • Labour union

    • Trade organisation

    • Pressure group

    • Campaigning group

    Correct Answer
    A. Pressure group
    Explanation
    A pressure group is an organization formed by individuals with shared interests, aiming to influence public policy and decisions. Unlike a labor union, which specifically focuses on advocating for workers' rights and benefits, a pressure group can represent various causes and interests. While a trade organization typically represents businesses within a specific industry, a pressure group can encompass a broader range of issues. Similarly, a campaigning group may focus on a specific cause or campaign, while a pressure group can address multiple concerns. Therefore, a pressure group is the most suitable term for an organization of individuals united to further their common interest.

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  • 43. 

    Which of the following is least likely to be an objective of pressure groups?

    • Influence business and consumer behaviour

    • Change government policy

    • Change opinions of the general public

    • Change government macroeconomic objectives

    Correct Answer
    A. Change government macroeconomic objectives
    Explanation
    Pressure groups are typically focused on advocating for specific interests or causes. While they may aim to influence business and consumer behavior, change government policy, and change public opinions, it is less likely for them to directly target and attempt to change government macroeconomic objectives. These objectives are usually determined by governments themselves, based on economic principles and the overall national interest, rather than being influenced by pressure groups.

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  • 44. 

    Special interest groups can affect business decision-making in all the following ways except

    • Public protests

    • Lobbying

    • Loitering

    • Stakeholder divergence

    Correct Answer
    A. Loitering
    Explanation
    Loitering is not a method used by special interest groups to affect business decision-making. Public protests, lobbying, and stakeholder divergence are all ways in which special interest groups can influence business decisions. Public protests involve demonstrations and gatherings to express concerns or demands, while lobbying refers to the efforts made by interest groups to influence lawmakers and policymakers. Stakeholder divergence refers to conflicts of interest among different stakeholders, which can impact decision-making. However, loitering, which refers to lingering or hanging around without a specific purpose, does not have a direct impact on business decision-making.

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  • 45. 

    What is the primary role of a trade union?

    • Push for higher wages for staff

    • Represent members in disciplinary and grievance matters

    • Uphold the welfare of its members

    • Negotiate contracts with employers for its members

    Correct Answer
    A. Uphold the welfare of its members
    Explanation
    The primary role of a trade union is to uphold the welfare of its members. This means that the trade union works to protect the rights and interests of its members, ensuring that they are treated fairly and have access to benefits such as job security, fair wages, and safe working conditions. The trade union acts as a collective voice for its members, advocating for their needs and concerns and working to improve their overall well-being in the workplace.

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  • 46. 

    Lobbying groups would not typically support

    • The protection of animals

    • Treatment of workers

    • Deforestation

    • Anti-smoking

    Correct Answer
    A. Deforestation
    Explanation
    Lobbying groups would not typically support deforestation because it involves the destruction of forests and natural habitats, which can have negative environmental impacts. Many lobbying groups advocate for environmental conservation and sustainability, so they would likely oppose deforestation due to its contribution to climate change, loss of biodiversity, and disruption of ecosystems. Additionally, deforestation can also have economic and social consequences, such as the displacement of indigenous communities and the loss of natural resources. Therefore, lobbying groups would generally not support deforestation.

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  • 47. 

    Anti-piracy advertising against the illegal downloading of music and movies would be an example of a campaign promoted by

    • Trade unions

    • Industry trade groups

    • Local communities

    • Pressure groups

    Correct Answer
    A. Industry trade groups
    Explanation
    Industry trade groups would be the most likely promoters of an anti-piracy advertising campaign against the illegal downloading of music and movies. These groups are formed by businesses in a specific industry to promote and protect their common interests. In this case, industry trade groups representing the music and movie industries would have a vested interest in curbing piracy, as it negatively impacts their revenue and intellectual property rights. They would likely collaborate on a campaign to raise awareness about the issue and discourage illegal downloading.

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  • 48. 

    Stakeholder group X has the folowing interests: financial benefits, job security, working environment and continuous professional and development needs. Which stakeholder group is least likely to be X?

    • The management

    • Directors

    • Employees

    • Entrepreneurs

    Correct Answer
    A. Entrepreneurs
    Explanation
    Entrepreneurs are least likely to be stakeholder group X because they are typically individuals who start their own businesses and take on financial risks in order to achieve their goals. They are not part of an existing organization or management structure, so their interests may differ from those of employees, directors, or management. While financial benefits may be important to entrepreneurs, their focus is usually on creating and growing their own business rather than job security, working environment, or continuous professional development needs.

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  • 49. 

    Which statement below does not apply to shareholders of a business?

    • They are the owners of limited companies

    • They have an interest in the operations and survival of the business

    • They are all internal stakeholders

    • They receive dividends each year based on the number of shares they hold

    Correct Answer
    A. They receive dividends each year based on the number of shares they hold
    Explanation
    Shareholders of a business are the owners of limited companies, meaning they have ownership rights and are entitled to a share of the company's profits. They also have an interest in the operations and survival of the business as their investment is tied to its success. However, the statement that they receive dividends each year based on the number of shares they hold does not apply universally to all shareholders. Dividends are distributed to shareholders, but the amount and frequency of dividends can vary depending on the company's profitability and its dividend policy. Some companies may choose not to distribute dividends at all.

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  • Current Version
  • Feb 14, 2023
    Quiz Edited by
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  • Jul 10, 2012
    Quiz Created by
    Catherine Halcomb

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