An MNC may be more exposed to agency problems if most of its shares are held by:
A)a few mutual funds.
B)a widely dispersed set of individual investors.
C)a few pension funds.
D)all of the above would prevent agency problems.

Question

Quizplus · Accepted Answer

When a widely dispersed set of individual investors hold majority shares, it becomes harder for any one group to exercise control over management, thus reducing the risk of agency problems. In contrast, if a few mutual or pension funds hold majority shares, they may have more power to influence and control management, leading to potential conflicts of interest and agency problems.

An MNC May Be More Exposed to Agency Problems If