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Why Do Publicly Traded Companies Rely on the Positive Opinion

Question 7

Multiple Choice

Why do publicly traded companies rely on the positive opinion of shareholders?


A) The SEC is liable to investigate a firm for financial fraud on a moment's notice.
B) Firms need to keep demand for the company's stock high and the stock price strong.
C) Shareholders consume more of a company's products than non-shareholders.
D) Shareholders rarely, if ever, follow corporate business news.
E) The financial media are not legally allowed to recommend stocks to investors.

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