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Chapter 17: Q.18 (page 426)

How do the shareholders who own a company choose the actual company managers?

Short Answer

Expert verified

The managers are chosen by the shareholders who have voting rights.

Step by step solution

01

Step 1. Concept of shareholder

an individual who claims stock in a very enterprise is thought as an investor.

02

Step 2. Explanation

Shareholders own the share of company. Their ownership depends upon the percentage of shares of they own. Every shareholder has a voting right .they vote and choose the board of directors which in turn hire the top executives and mangers to run the company.

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Most popular questions from this chapter

Why are banks called “financial intermediaries”?

What is an index fund?

What is the difference between a private company and a public company?

The Darkroom Windowshade Company has 100,000 shares of stock outstanding. The investors in the firm own the following numbers of shares: investor 1 has 20,000 shares; investor 2 has 18,000 shares; investor 3 has 15,000 shares; investor 4 has 10,000 shares; investor 5 has 7,000 shares; and investors 6 through 11 have 5,000 shares each. What is the minimum number of investors it would take to vote to change the company's top management? If investors 1 and 2 agree to vote together, can they be certain of always getting their way in how the company will be run?

Why should a financial investor care about

diversification?
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