Which of the Following Statements Is CORRECT

question 9

Multiple Choice

Which of the following statements is CORRECT?

• A) Corporations face few regulations and more favorable tax treatment than do proprietorships and partnerships.
• B) Managers who face the threat of hostile takeovers are less likely to pursue policies that maximize shareholder value compared to managers who do not face the threat of hostile takeovers.
• C) Bond covenants are an effective way to resolve conflicts between shareholders and managers.
• D) Because of their simplified organization,it is easier for proprietors and partnerships to raise large amounts of outside capital than it is for corporations.
• E) One advantage to forming a corporation is that the owners of the firm have limited liability.

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Definitions:

Cognitive Dissonance Theory

A theory suggesting that individuals experience psychological discomfort or dissonance when they hold two or more contradictory beliefs, ideas, or values simultaneously.

Criticism

The act of expressing disapproval or pointing out the faults in someone or something.

Perceived Value

The worth or importance a consumer assigns to a product, service, or brand, based on how well it is believed to meet needs and expectations.

Effort

The amount of physical or mental energy expended to achieve a goal.