Page 69 - ACCA P1 slides 2017-18

Insider-dominated structure(vs outsider-

dominated)

Benefits:

• Fewer agency problems & costs

• Lower cost of capital

• Greater access to capital

• Less short-termism

• Greater input to decisions

Problems:

• Lack of minority shareholder protection

• Opaque operations

• Misuse of power

• Market does not decide or govern

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