The large increase in institutional ownership in public companies Question 12 op
ID: 2815948 • Letter: T
Question
The large increase in institutional ownership in public companies
Question 12 options:
a)
Hurts the individual investor by reducing their options
b)
Prevents companies from being able to operate efficiently
c)
Minimizes the role of the board of directors in a corporation
d)
Allows the institutions to put pressure on companies to operate effectively
a)
Hurts the individual investor by reducing their options
b)
Prevents companies from being able to operate efficiently
c)
Minimizes the role of the board of directors in a corporation
d)
Allows the institutions to put pressure on companies to operate effectively
Explanation / Answer
d)Allows the institutions to put pressure on companies to operate effectively
Since the ownership of institutons increases, they get controlling interest in the company, thereby allowing them to put pressure on the company.
It does not hurt the individual investor since he buys shares in small quantities
It does not prevent company from operating effectively rather it wants them to operate effectively
Does not minimise the role of BoD who continue their role.
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