Public limited companies may not maximize their profits because ?
Correct answer: B. shareholders have little control over managers.
- A. they are afraid of encouraging takeovers.
- B. shareholders have little control over managers.
- C. shareholders want higher dividends.
- D. both the first and third option.
Explanation
Managers of public companies may pursue growth, security, or personal objectives because dispersed shareholders cannot closely control them. This separation of ownership and management can weaken strict profit maximization.
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