CFA Level I · CFA Level I Exam · Investors and Other Stakeholders
Which stakeholder group is most likely to be primarily concerned with the firm's ability to keep making interest payments and repay principal on schedule?
Creditors are most concerned with timely interest and principal payments. Their claim is fixed by contract, so their return depends on the firm's liquidity and solvency rather than on profit growth. Shareholders focus on residual returns, and regulators on legal and safety compliance.
- ACreditorsCorrect
- BMinority shareholders
- CRegulators of product safety
Explanation
Creditors hold fixed contractual claims, so their main interest is the firm's liquidity and solvency to service debt. Shareholders focus on residual returns and regulators on compliance.
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
- Which interest is most likely to be the primary concern of a corporate issuer's employees as a stakeholder group?
- Which of the following stakeholder relationships is most likely classified as a contractual relationship in the stakeholder management frame…
- In the stakeholder management framework used in corporate finance, a company's stakeholders are most likely to be best described as:
- A board considers compensation for a CEO whose firm has significant debt. Which design is most likely to reduce both the shareholder-manager…
- The board of a listed company is considering a proposal in which the CEO's long-term incentive pay vests entirely on one-year earnings per s…
- A highly leveraged firm's shareholders approve a plan to replace a stable business line with a high-risk venture offering a small chance of …