Question

When country governance is weak, _____________ can serve as a substitute, but a problem that may arise is _____________

A)Diffused Ownership; it’s hard to come together to make decisions

B)Diffused Ownership; diffused owners may take advantage of minority owners

C)Concentrated Ownership; concentrated owners may take advantage of minority owners

D)Debt Ownership; debt owners may take advantage of non-debt owners

E)Concentrated Ownership; it’s hard to come together to make decisions

Answer 1

Answer - option (E)] Wence influ concentrated ownersbébés au about internal governance in which owners can control the of Management of the firm. The main focus will be on ownership concentration and corporate governance, so that all the internal altr'retries can be controlled properly and substitletion effect will be less. But sometime it is difficult to take decision together during recession time in which country's governance is less effective and weak · Debt owner's he's and distused Ownership can not be serne as a substitute, because these are used as mode of financing in corporate sectores . only concentrated ownesship can control the governance and reduce the conflict of interest among share- holderes. Au the best for your exam!