Investors generally can make one vote for each share of stock they hold. TIAA-CREF is the largest
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In the past, TIAA-CREF responded to poor performance by voting with its feet. which means selling stocks that were not doing well. However, by 1993, that position had become difficult to maintain for two reasons. First, the fund invested a large part of its assets in index funds, which hold stocks in accordance with their percentage value in the broad stock market. Furthermore, TIAA-CREF owns such large blocks of stocks. In many companies that if it tried to sell out, doing so would severely depress the prices of those stocks. Thus, TIAA-CREF is locked in to a large extent, which led to its decision to become a more active investor.
a. Is TIAA-CREF an ordinary shareholder? Explain.
b. Due to its asset size, TIAA-CREF owns many shares in a number of companies. The funds management plans to vote those shares. However, TIAA-CREF is owned by many thousands of Investors. Should the funds managers vote its shares; or should it pass those votes, on a pro rata basis, back to its own shareholders? Explain.
Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing...
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Related Book For
Fundamentals of Financial Management
ISBN: 978-0324664553
Concise 6th Edition
Authors: Eugene F. Brigham, Joel F. Houston
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