Which of the following statements about shareholder proposals is true?

Question

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Shareholder proposals are relatively inexpensive to submit and can be submitted by any shareholder, but management can still ignore them even if they are passed by a majority of the votes. The probability of success varies depending on the proposal and the company's response to it, but it is not necessarily low. While shareholder proposals can be a valuable means of expressing shareholder concerns and influencing management decisions, they are not necessarily the most effective management control mechanism. Shareholder proposals tend to be relatively cheap to submit, but management can ignore them even if they are passed by a majority of the votes. This is because such proposals are non-binding and thus do not legally obligate management to take any action. Option A is incorrect because the cost of submitting a proposal can vary, and the probability of success can depend on various factors such as the level of support from other shareholders. Option B is incorrect because there is no restriction on who can submit a shareholder proposal, as long as they meet certain eligibility criteria prescribed by the Securities and Exchange Commission (SEC). Option C is incorrect because while shareholder proposals can be an effective mechanism for influencing management, they are not always the most effective or appropriate approach, and their impact can depend on various factors such as the nature of the proposal, the level of support from other shareholders, and the receptiveness of management.

Which of the Following Statements About Shareholder Proposals Is True