In most public firms, although the executive management is in charge of running the business profitably, they are also the agents of the stockholders and they techinally work for the stockholders. They must do whatever the majority of stockholders want the firm to do. Multiple Choice The company management must first satisfy the investors who bought company bonds, then they must satisfy bankers who lent money to the firm, then the company management can worry about serving the wishes of the stockholders who are in third place. This is false. The company management only answers to themselves and they do not need to bow down to any other group. The only responsibility the comapny managers have to the stockholders is to take part of the annual profits and allow the stockholders to benefit by paying them dividends based on the stocks they own. The company management has no other obligation to stockholders. This is true because the stockholders are technically the owners of the firm.

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ANSWER The correct answer is The company management must first satisfy the investors who bought comp... View the full answer