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Does increasing managerial ownership stakes improve firm performance? (Select all the choices that apply.) A. No. As Demsetz and Lehn (1985) argue, there is no

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Does increasing managerial ownership stakes improve firm performance? (Select all the choices that apply.) A. No. As Demsetz and Lehn (1985) argue, there is no reason to expect a simple relation between ownership and performance. There are many dimensions to the corporate governance system and a one-size-fits-all approach is too simplistic; the correct ownership level for one firm may not be the correct level for another. B. Yes. As Demsetz and Lehn (1985) argue, there is a simple relation between ownership and performance. Therefore, increasing managerial ownership stakes can improve firm performance at all levels of management ownership. OC. Yes. Some studies have shown a non-linear relationship between firm valuation and ownership-specifically that increasing ownership is good at first, but that in a certain range, managers can use their ownership level to partially block efforts to constrain them, even though they still own a minority of the shares. In this ?entrenching? range, increasing ownership could increase performance. D. No. Some studies have shown a non-linear relationship between firm valuation and ownership-specifically that increasing ownership is good at first, but that in a certain range, managers can use their ownership level to partially block efforts to constrain them, even though they still own a minority of the shares. In this ?entrenching? range, increasing ownership could reduce performance

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