CFA Level I · CFA Level I Exam · Investors and Other Stakeholders
Which interest is most likely to be the primary concern of a corporate issuer's employees as a stakeholder group?
Employees are most concerned with job security, wages, and working conditions. Their livelihood depends on the firm, whereas a residual claim on profits belongs to shareholders and timely interest and principal payments matter to creditors.
- AJob security, wages, and working conditionsCorrect
- BResidual claim on profits after all other obligations
- CTimely payment of interest and principal
Explanation
Employees depend on the firm for income and careers, so their main interests are job security, compensation and working conditions. A residual claim belongs to shareholders, and interest and principal payments concern creditors.
Did you get it right without looking?
One question tells you little. A timed set on Investors and Other Stakeholders shows your real accuracy, how long you take and where you lose marks.
More Investors and Other Stakeholders questions
- Executives whose bonuses depend entirely on short-term earnings cut research spending to meet quarterly targets, harming long-term value. Th…
- A manufacturer's board is deciding whether to close a plant. Under the stakeholder management framework, which approach is most appropriate …
- A listed company's managers are paid mostly through annual cash bonuses tied to current-year earnings. Shareholders are most likely to be co…
- A company is nearing financial distress. Which stakeholder is most likely to prefer that management take on a high-risk, high-variance inves…
- A company's board chair is also its chief executive officer, and most directors were appointed by the chair and have long personal ties to m…
- A government-owned airline is listed on a stock exchange, with the state holding 60% of the shares and private investors holding 40%. Relati…