Question

what is one potential advantage of being a privately-held company?
risk is spread among a larger pool of investors in a private company.
if a company is private, it is better positioned to pursue acquisitions.
a private company has access to less expensive sources of capital than a public company.
if managers also own the company, they are strongly incentivized to succeed

Explanation:

• Analyze each option:
• First option: Public companies (not private) spread risk among a larger pool of investors. Eliminate.
• Second option: Public companies often have more resources for acquisitions. Private companies aren't better positioned for this. Eliminate.
• Third option: Public companies generally have access to cheaper capital (e.g., via public markets). Private companies have more limited/expensive capital access. Eliminate.
• Fourth option: If managers own the private company, their personal wealth is tied to the company’s success, creating strong incentives to succeed. This is a valid advantage of private companies.

Answer:

D. If managers also own the company, they are strongly incentivized to succeed (assuming the last option is labeled D; if the original labels were different, adjust the identifier but keep the text. Based on the options, the correct one is the last option: "If managers also own the company, they are strongly incentivized to succeed")