Which of the following is a common problem associated with tracking stocks?
A) Tracking stocks often de-motivate managers of the business for which the stock is created
B) Such stocks are too complicated for investors to understand
C) Tracking stocks may create internal operating conflicts among the parent's business units
D) Such stocks often create huge tax liabilities for the parent
E) None of the above

Question

Quizplus · Accepted Answer

Tracking stocks may create internal operating conflicts among the parent's business units. This is because different business units may be focused on different metrics, and the tracking stock may only reflect the performance of one particular unit. This can lead to tensions among different units as they compete for resources and recognition. The other options are not common problems associated with tracking stocks.

Which of the Following Is a Common Problem Associated with Tracking