What are the shareholder incentives within a corporation?
What will be an ideal response?
Shareholders are divided into three types: small shareholders, institutional investors and large blockholders. Small shareholders have no incentive to take an active role in the governance process. Institutional investors like pension funds, insurance companies, index funds, trusts hold a major portion of the shares. So they are a little more involved with the process and participate in voting actively. Blockholders have the strongest incentives to participate in the governance process.
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In the monetary small open-economy model, a flexible exchange rate insulates the domestic price level from
A) both real and nominal shocks from abroad. B) real shocks from abroad, but not from nominal shocks from abroad. C) nominal shocks from abroad, but not from real shocks from abroad. D) neither real nor nominal shocks from abroad.
As the price of a good declines, a utility-maximizing consumer will respond by purchasing more of that good
a. True b. False Indicate whether the statement is true or false
One problem with regulating a monopolist on the basis of cost is that
a. by focusing on costs, the regulators ignore profits. b. it does not provide an incentive for the monopolist to reduce its cost. c. a monopolist's costs, by definition, are higher than costs of perfectly competitive firms. d. a monopolist is still able to generate excessive economic profits.
Expansionary fiscal policy actions
A) Result in an increase in national debt. B) Lead to growth in aggregate demand resulting from lower interest rates. C) Can be inflationary if the economy is in the Keynesian range of aggregate supply curve. D) None of the above.