Risk spreading explains why most large companies have:

Question

Quizplus · Accepted Answer

Risk spreading refers to the practice of spreading investment risk among a large number of shareholders. This is achieved by having many shareholders, which is why large companies tend to have many shareholders. A large number of shareholders reduces the risk for any one individual shareholder, allowing each shareholder to invest more confidently in the company. This can help the company to raise more capital and grow more quickly, which can lead to higher profit rates. Therefore, the correct answer is D (many shareholders).

Risk Spreading Explains Why Most Large Companies Have