Question

Corporate insiders include officers, directors, and beneficial owners who own _____ % of a class of securities registered under Section 12 of the Securities Exchange Act of 1934.

a) 5%
b) 10%
c) 15%
d) 20%

Answer 1

Corporate insiders are defined as officers, directors, and beneficial owners who own at least 10% of a class of securities registered under Section 12 of the Securities Exchange Act of 1934. They can significantly influence a public company due to their substantial ownership.

Step-by-step explanation:

Corporate insiders include officers, directors, and beneficial owners who own 10% of a class of securities registered under Section 12 of the Securities Exchange Act of 1934. In the context of a public company, shareholders are the owners of the company, and the amount of stock they own determines their voting power in corporate decisions, particularly in the election of the board of directors. Large public companies like IBM, Microsoft, and Exxon have millions of shares owned by numerous shareholders, meaning that no single individual typically holds a majority of shares. However, those with significant holdings, including corporate insiders owning at least 10% of a class of stock, have considerable influence.