Which of the following is true of the stakeholder theory?

Question

Quizplus · Accepted Answer

The stakeholder theory recognizes that a firm has multiple stakeholders, including employees, customers, suppliers, and the community, and not just shareholders. It also acknowledges that the interests of these stakeholders should be taken into account in business decisions. Option A is incorrect because the stakeholder theory does acknowledge the importance of non-financial stakeholders in the firm's operations. Option C is incorrect because the presence of debt may increase a firm's profits, but only if there are new investment opportunities. Option D is incorrect because financial distress may be equally costly for firms in any industry, regardless of whether they sell durable or non-durable goods.

Which of the Following Is True of the Stakeholder Theory