Question

Because of poor management, the stock prices of DigiKing Inc. falls and many investors sell their shares. Soon DigiKing becomes the target of a hostile takeover, during which Charles buys enough shares to exert control over the firm. In this scenario, Charles performs the role of a(n)

Answer 1

In the case of DigiKing Inc., Charles fulfills the role of a major shareholder or a corporate raider by buying sufficient shares to control the company during a hostile takeover.

Step-by-step explanation:

When DigiKing Inc. experiences a decline in stock prices due to poor management, it becomes vulnerable to a hostile takeover. In this scenario, if Charles buys enough shares to exert control over the firm, he is performing the role of a major shareholder or potentially, a corporate raider depending on his intentions post-takeover. A public company is one where the stock can be bought and sold by financial investors, and the shareholders vote for a board of directors. The more stock a shareholder owns, the more influence they have over the company through board of director elections.