Which of the Following Statements Is FALSE

question 7

Multiple Choice

Which of the following statements is FALSE?

• A)Controlling shareholders pay for their control rights because the firm effectively faces a higher cost of equity for outside capital.
• B)Most countries follow what is called the stakeholder model,giving explicit consideration to other stakeholders-in particular,rank-and-file employees.
• C)In a pyramid structure,a family first creates a company in which it owns more than 50% of the shares and therefore has a controlling interest.
• D)A conflict of interest arises because the family has an incentive to try to move profits (and hence dividends)down the pyramid-that is,toward companies in which it has few cash flow rights and away from firms in which it has more cash flow rights.

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Definitions:

World's Oil

Refers to the global production, distribution, and consumption of crude oil as a key energy source.

Saudi Arabia

A sovereign country in the Middle East, known for its vast oil reserves, which play a central role in its economy, and as the birthplace of Islam.

Price Of Oil

The cost per barrel of crude oil, influenced by factors such as supply, demand, geopolitical tensions, and production decisions by OPEC and non-OPEC countries.

Fast Food Chains

A series of restaurants offering quick service and a menu of fast food cuisine spread across multiple locations.