Which One of the Following Statements Is TRUE

question 11

Multiple Choice

Which one of the following statements is TRUE?

• A) Asset switching occurs when a company borrows money for a safe investment but uses it for a
• Risky investment.
• B) An example of an agency cost is when the board of directors pays a dividend to shareholders.
• C) An example of an agency cost is when an attorney hires an expert witness for a trial.
• D) The commission required by the Federal Housing Agency for a small business loan is an example of
• An agency cost.
• E) An example of an agency cost is the salary of the agent hired to work for the principal.

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Definitions:

Prize Roses

Specially bred and highly valued roses that are often grown for competitive display in horticultural shows.

Wild Orangutan

A species of great apes known for their intelligence and dwell primarily in the rainforests of Borneo and Sumatra, facing threats from habitat destruction.

Modular Homes

Houses constructed in modules or sections in a factory setting, then transported and assembled on-site.

Dangerous Business

A type of business operation that inherently involves significant risks to public safety, health, or the environment.