Asked by Katherine Lupercio on May 06, 2024
Verified
Activist investors become catalysts for changes aimed at improving financial performance and increasing stock price by:
A) Gaining the support of other shareholders especially institutional investors that control large blocks of stock.
B) Seeking seats on the Board of the Directors
C) Vocalizing their proposed changes in management and strategy.
D) All of the above
Activist Investors
Activist investors are shareholders that use their equity stake in a corporation to influence its management and operations, often with the goal of increasing shareholder value.
Institutional Investors
Large entities, such as pension funds, mutual funds, and insurance companies, that make substantial investments in various financial markets.
Financial Performance
An assessment of how well a firm uses assets from its primary mode of business and generates revenues.
- Recognize the strategies used by activist investors to influence corporate governance and performance.
Verified Answer
ZK
Zybrea KnightMay 07, 2024
Final Answer :
D
Explanation :
Activist investors typically use a combination of tactics to achieve their goals, including gaining support from other shareholders, seeking seats on the Board of Directors, and vocalizing their proposed changes in management and strategy. By doing so, they can effectively advocate for changes that they believe will improve the company's financial performance and increase its stock price. Therefore, the best answer is D, which includes all of these tactics.
Learning Objectives
- Recognize the strategies used by activist investors to influence corporate governance and performance.