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Answered: What is a Stakeholder Analysis and what…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Question

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Expert Solution

Step 1: Introduction:

A shareholder is any individual, entity, or other group that owns any amount of a company's shares. Stock ownership, usually referred to as equity, represents a share of the corporation's ownership. Since they own a piece of the business, shareholders benefit financially and through incentives from its performance. However, if the value of the company's stock drops, they can be harmed. These consequences might include losing the money they invested in the company and/or experiencing a decline in the value of their portfolio. Because they are not directly responsible for the obligations and liabilities of the firm, investors only run the risk of losing the money they have specifically invested.