Once a firm has thousands of shareholders the agency problem is accentuated because of:
A)Coordination difficulties
B)Coordination difficulties, and it is easier for disgruntled stockholders to sell their shares than engage management
C)Coordination difficulties and information asymmetry
D)The costs of engagement are lower than the likely returns

Question

Quizplus · Accepted Answer

With thousands of shareholders, coordinating them becomes difficult, and dissatisfied shareholders may find it easier to sell their shares rather than engage with management, exacerbating the agency problem.

Once a Firm Has Thousands of Shareholders the Agency Problem