Q. When company ownership is diffuse, (Solved)

1. a "free rider" problem discourages shareholder activism.

2. the large number of shareholders ensures strong monitoring of managerial behavior because with a large enough group, there's almost always someone who will to incur the costs of monitoring management.

3. few shareholders have a strong enough incentive to incur the costs of monitoring management.

4. both a) and c) are correct