Firms run by executives with high levels of stock ownership are much less likely to pursue acquisitions and divestitures.

Question

Quizplus · Accepted Answer

Studies have shown that firms with executives who have high levels of stock ownership are less likely to pursue acquisitions and divestitures. This is because when executives own a significant amount of stock, they are more likely to prioritize long-term growth and stability of the company over short-term gains from mergers and acquisitions.

Firms Run by Executives with High Levels of Stock Ownership