BuyFindarrow_forward

Brief Principles of Macroeconomics...

8th Edition
N. Gregory Mankiw
ISBN: 9781337091985

Solutions

Chapter
Section
BuyFindarrow_forward

Brief Principles of Macroeconomics...

8th Edition
N. Gregory Mankiw
ISBN: 9781337091985
Textbook Problem

Many workers hold large amounts of stock issued by the firms at which they work. Why do you suppose companies encourage this behavior? Why might a person not want to hold stock in the company where he works?

To determine

Why companies promote workers to hold large number of stocks of their company but not workers.

Explanation

Both the stocks and the bonds are the financial market instruments used by the people in the economy. Amongst them, the share provides the ownership right to those who own them, whereas the bond is an income investment which is fixed and thus it acts as a certificate of indebtedness. There are many matches between the stocks and bonds. Both of them are financial instruments, used to raise capital to the firm, traded on exchange and entail risks.

It is usually found that the workers of the companies will be encouraged to own large quantities of stock of the companies in which they work. This is because, when the employees own the stocks of the company, they will care about the company because they can have the profit share of the company...

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

Why do economists make assumptions?

Principles of Economics (MindTap Course List)

If a companys beta were to double, would its required return also double?

Fundamentals Of Financial Management, Concise Edition (mindtap Course List)

Discuss target market strategies

MKTG 12:STUDENT ED.-TEXT

DUPONT ANALYSIS A firm has been experiencing low profitability in recent years Perform an analysis of the firms...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)