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1.
A companys board of directors represents its management.
False. The board represents the shareholders and their interests.
2.
To learn about a prospective company, stock analysts might interview _______.
All of the above. An analyst might interview all of them, and others as well, such as suppliers.
3.
How much money the company pays its CEO and top management is _______.
An important sign of how the company has set up its incentive system. The compensation of top corporate officers is a touchy subject, mostly because a lot of corporate officers are paid a great deal of money. We dont have any hard and fast rules for determining how much is "too much," but at the extremes, executive pay can eat up a significant chunk of corporate profits, which eats directly into shareholder returns.
4.
Investors should look for companies that _______.
Have set clear goals for measuring progress. Good measurement is good management.
5.
Should an investor look with suspicion on companies whose employees do not have a clear separation between business and personal relationships?
Yes. Lack of a boundary can be very bad for business.
