Which of the Following Statements Is CORRECT

question 57

Multiple Choice

Which of the following statements is CORRECT?

• A) One disadvantage of operating as a corporation rather than as a partnership is that corporate shareholders are exposed to more personal liability than are partners.
• B) Relative to proprietorships, corporations generally face fewer regulations, and they also find it easier to raise capital.
• C) There is no good reason to expect a firm's stockholders and bondholders to react differently to the types of assets in which it invests.
• D) Stockholders should generally be happier than bondholders to have managers invest in risky projects with high potential returns as opposed to safe projects with lower expected returns.
• E) Bondholders should generally be happier than stockholders to have managers invest in risky projects with high potential returns as opposed to safe projects with lower expected returns.

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Definitions:

Algae

a diverse group of photosynthetic organisms that live in aquatic environments, ranging from unicellular microalgae to large seaweeds.

Rain Shadow

Leeward side (side sheltered from the wind) of a mountainous barrier, which receives much less precipitation than the windward side.

Windward Side

The side of an island, mountain, or landmass that faces the wind and receives the most rain and weather due to prevailing winds.

Leeward Side

The side of an object or area sheltered from the wind, opposite the windward side.