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1 year ago

Why would the threat of a takeover motivate a manager to act in stockholders' interest?

1 answer:

3 0

Running the firm well and acting in the stockholders' interest makes the firm a less attractive takeover target, to begin with.

<h3>Who are Stockholders?</h3>

A shareholder of a corporation is an individual or legal entity that is registered by the corporation as the legal owner of shares of the share capital of a public or private corporation.
Shareholders may be referred to as members of a corporation.
As noted above, a shareholder is an entity that owns one or more shares in a company's stock or mutual fund.
Being a shareholder (or a stockholder as they're also often called) comes with certain rights and responsibilities.

<h3>Which of the following mechanisms is used to motivate managers to act in the interests of shareholders? </h3>

The threat of a takeover

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Answer:

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False ...................

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