Which of the Following Statements Is FALSE

question 33

Multiple Choice

Which of the following statements is FALSE?

• A)In bankruptcy,management is given the opportunity to reorganize the firm and renegotiate with debt holders.
• B)Because a corporation is a separate legal entity,when it fails to repay its debts the people who lent to the firm,the debt holders,are entitled to seize the assets of the corporation in compensation for the default.
• C)As long as the corporation can satisfy the claims of the debt holders,ownership remains in the hands of the equity holders.
• D)If the corporation fails to satisfy debt holders' claims,debt holders may lose control of the firm.

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Definitions:

Lateral Communication

The exchange of information between individuals at the same hierarchical level within an organization.

External Stakeholders

Individuals or groups outside of an organization who are affected by its activities and decisions, such as customers, suppliers, and the community.

Internal Differentiation

The division of labor and specialization within an organization that creates distinct roles and responsibilities.

Network-Designed Organization

An organizational structure that focuses on decentralization, where operations are connected by informal networks and the flow of information.