As more shareholders own fewer shares of stock,shareholders' incentives to monitor managerial decisions:

Question

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As more shareholders own fewer shares of stock, their individual influence and power over managerial decisions decreases, which makes it harder for them to effectively monitor managerial decisions. This is because they may not have enough voting power to influence corporate decisions, and their interests may also be diluted by the presence of a larger number of shareholders. Therefore, the incentives for shareholders to monitor managerial decisions decrease.

As More Shareholders Own Fewer Shares of Stock,shareholders' Incentives to Monitor