Week 2 - Why are Shareholders Considered to be the Most Important Stakeholder? Flashcards
(4 cards)
1
Q
What is the first reason shareholders are considered to be the most important stakeholder?
A
They have invested their hard-earned money into the company
2
Q
What is the second reason shareholders are considered to be the most important stakeholder?
A
They are the holders of residual risk - if the company goes bankrupt, they get paid last
3
Q
What is the order of payments if the company goes bankrupt?
A
Banks > trade creditors > other debts > shareholders
4
Q
Thus, what do the shareholders need?
A
Need the company succeed to get maximum returns
