Which One of the Following Statements Is TRUE

question 45

Multiple Choice

Which one of the following statements is TRUE?

• A) An example of an agency cost is when an outside investor is only willing to pay less for stock because she thinks the original owner will consume too many perquisites.
• 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:

Better-Educated

Referring to individuals who have achieved higher levels of education, implying they have obtained more extensive knowledge or qualifications in certain fields.

Text-Based Communication

The exchange of information between individuals or groups through written language, utilizing digital platforms or traditional methods without face-to-face interaction.

Computer-Mediated Communication

Communication between people through the use of computers and the internet, encompassing emails, chats, social media, and other digital platforms.

Trust Development

The process by which individuals build confidence in each other's intentions and abilities, crucial for effective collaboration and teamwork.