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CFA Level I · CFA Level I Exam · Investors and Other Stakeholders

In the stakeholder management framework used in corporate finance, a company's stakeholders are most likely to be best described as:

Stakeholders are groups that can affect or are affected by the firm, including employees, customers, suppliers, creditors and shareholders. The framework is broad, so it is not restricted to owners or to parties with contractual claims on cash flows.

  1. Aonly the shareholders who own the firm's equity.
  2. Bgroups such as employees, customers, suppliers and creditors that can affect or are affected by the firm.Correct
  3. Conly parties holding a contractual claim on the firm's cash flows.

Explanation

Stakeholder management takes a broad view of the firm: any group that can affect or is affected by its decisions is a stakeholder. Limiting the definition to shareholders or to contractual claimants is too narrow, because employees, customers and communities can also hold non-contractual interests.

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