26. Which of the following would be considered a benefit to having inside directors on a board of directors?

Greater independence from managerial influence

Greater first-hand knowledge about the firm

More effective control of managers

Ability to control the CEO

27. In corporate governance, most small shareholders:

attend annual shareholder meetings.

have strong incentives to monitor how the firm is being run. prefer to free ride and hope other shareholders monitor manager behavior. rarely hold stock for a long period of time.

28. In countries that have weak formal legal and regulatory institutions, concentrated ownership and control:

minimizes the occurrence of principal-principal conflicts.

mostly benefits minority shareholders.

minimizes the occurrence of principal-agent conflicts.

are likely to become more diffuse.

29. Which of the following is true regarding large institutional investors?

They include professionally managed mutual funds and pension pools.

They own about 25 percent of the stock in major corporations.

They are less likely to exercise shareholder rights than smaller investors.

Their ability to dump the stock is unlimited.