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CFA Level I · CFA Level I Exam · Organizational Forms, Corporate Issuer Features, and Ownership

A cooperative-style firm is owned by its members, who are also its customers and receive benefits in proportion to their use of its services. Relative to a publicly traded corporation, the firm is most likely to:

A member-owned cooperative most likely prioritizes benefits to its member-customers over maximizing returns to outside shareholders. Its purpose is to serve users who are also owners, so it does not typically issue publicly traded shares or focus mainly on maximizing share price.

  1. Aprioritize member benefits over maximizing returns to outside shareholdersCorrect
  2. Bissue freely traded shares on public exchanges
  3. Caim principally to maximize share price

Explanation

A cooperative exists to serve its members, who are owners and users, so objectives center on member benefits instead of shareholder return maximization. Cooperatives do not typically have freely traded shares nor a main goal of share price maximization.

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