QUESTION 3If shareholders are unhappy with a CEO's performance, they are most likely to:a.replace the CEO through a grassroots shareholder uprising.b.sell their shares.c.organise a demonstration in front of the headquarter building.d.file a shareholder resolution.e.buy more shares in an effort to gain control of the firm.
Question
QUESTION 3If shareholders are unhappy with a CEO's performance, they are most likely to:a.replace the CEO through a grassroots shareholder uprising.b.sell their shares.c.organise a demonstration in front of the headquarter building.d.file a shareholder resolution.e.buy more shares in an effort to gain control of the firm.
Solution
The most likely action shareholders would take if they are unhappy with a CEO's performance is b. sell their shares. This is the most direct and immediate way shareholders can express their dissatisfaction. If enough shareholders sell their shares, it can cause the stock price to fall, which sends a strong message to the company's board of directors about the shareholders' lack of confidence in the CEO.
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