You are well aware of the risks that you face when you buy shares in a...

You are well aware of the risks that you face when you buy shares in a company that has shares with different voting rights. Assume that you have no choice but to buy non-voting shares in a company that has both voting and non-voting shares. Which of the following would you view as least dangerous to you (from a corporate governance standpoint)?

A. Voting shares are not traded and held entirely by CEO
B. Voting shares are traded, but concentrated in the hands of CEO
C. Voting shares are traded and widely dispersed across shareholders.
D. Voting shares are traded and held by CEO and by government-controlled institutions.
E. Voting shares are traded and held by activist investors.

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Expert Solution

Answer:

The correct answer is Option C.

Voting shares are shares that give the shareholders the right to vote on specific decision of the organization.Voting shares are normally traded and can be subscribed by any person including CEO. All the remaining options are incorrect.

jeff jeffy answered 2 years ago

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