Which One of the Following Statements Is TRUE

question 40

Multiple Choice

Which one of the following statements is TRUE?

• A) Outside shareholders will pay less for stock if they think the original owners will consume perquisites.
• B) Creditors have a claim on a firm's earning stream through the dividend payments they receive.
• C) An example of asset switching is an option to exchange one piece of real estate for another.
• D) An agency cost is the wage required to pay someone who is hired to perform a service.
• E) An example of an agency cost is when an attorney hires an expert witness for a trial.

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Definitions:

Decay Theory

Suggests that memory fades and loses detail over time if not actively maintained or revisited.

Impermanent Storage

A form of memory storage that is temporary, allowing information to be held for a short period before it is either forgotten or transferred to long-term memory.

Retrieval Failure

A cognitive psychology theory explaining how the inability to access stored information in the brain can lead to forgetting.

Proactive Interference

The phenomenon where old memories hinder the recall of newly learned information.