A firm with concentrated ownership
A)may give rise to conflicts of interest between dominant shareholders and small outside shareholders.
B)may enjoy more accounting transparency than firms with diffuse ownership structures.
C)is a partnership,never a corporation.
D)none of the options

Question

Quizplus · Accepted Answer

Concentrated ownership means a few dominant shareholders own a significant portion of the company's shares. This could lead to conflicts of interest between the dominant shareholders and small outside shareholders, who have little to no say in the company's decision-making process. As a result, the interests of the dominant shareholders may not always align with those of the small outside shareholders.

A Firm with Concentrated Ownership