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

Question

Quizplus · Accepted Answer

When more shareholders own fewer shares of stock, their individual interests in the company become less significant. This decrease in individual interest leads to a decrease in incentives to monitor managerial decisions, as their individual impact on any given decision becomes less significant. Therefore, the correct answer is A, as the incentives to monitor managerial decisions decrease.

As More Shareholders Own Fewer Shares of Stock, Their Incentives