BMF – Nov 2020 – L1 – SA – Q1 – Nature of Business, Types, and Objectives

Identify the item that is NOT of interest to shareholders in an organisation.

Question

Shareholders in large companies are usually investors seeking to earn a return on their investment in the form of dividends and a higher share price. Which of the following is NOT a matter that would be of interest to shareholders in an organisation?
A. A proposal to invest in a major project where the return is high
B. A proposed takeover bid for another company that offers better returns
C. Bonuses and shares
D. High dividend payments
E. Increasing profits and share price

Answer

C. Bonuses and shares

Explanation:
While dividends and profits are of primary interest to shareholders, bonuses and shares may relate more directly to employees and management rather than to shareholders. Shareholders are typically more focused on returns via dividends and share price appreciation. Bonuses and shares are more related to compensation packages for employees or executives rather than to the direct financial benefits of shareholders.

Tags: Corporate Actions, Dividends, Investments, Shareholders
Level: Level 1

Topic: Nature of Business, Types, and Objectives
Series: NOV 2020

Uploader: Dotse