Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The separation of ownership and managerial control allows shareholders to buy shares, which entitles them to an income (residual return) from the company's operations after

The separation of ownership and managerial control allows shareholders to buy shares, which entitles them to an income (residual return) from the company's operations after paying fees. This, however, requires that the shareholder take the risk that the company's expenses may exceed its income. To manage this investment risk, shareholders maintain a diversified portfolio by investing in several companies to reduce overall risk.

In your opinion, what causes the fact that the owner of the company should not be in the managerial sphere as well? Please explain.

Even if there are concurrent accounts, state examples of success and failure in their management!

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Business Intelligence

Authors: Efraim Turban, Ramesh Sharda, ...more

2nd Edition

013610066X, 9780136100669

More Books

Students also viewed these General Management questions

Question

1. Avoid conflicts in the relationship

Answered: 1 week ago

Question

1. What will happen in the future

Answered: 1 week ago