Which One of the Following Statements Is TRUE

question 2

Multiple Choice

Which one of the following statements is TRUE?

• A) Inside directors are likely to side with the CEO since they are employees.
• B) In a classified board, it is easier for dissidents to gain representation since fewer seats are up for election each year.
• C) Inside directors are more concerned with shareholders' interests since they are more closely concerned with firm operations.
• D) Since outside directors have no other connection with the firm, they are indebted to the CEO for putting them on the board.
• E) The more members of a board of directors, the better its function.

---

Definitions:

Cash Flows

The total amount of money being transferred into and out of a business, providing insights into its operational efficiency and financial health.

Consolidated Net Income

The total amount of net income earned by a parent company and its subsidiaries, presented as a single figure after eliminating inter-company transactions.

Bonds Payable

Long-term debts issued by corporations or governmental units, represented by formal certificates obligating the issuer to pay interest and repay principal at a specified maturity date.

Interest Expense

The cost incurred by an entity for borrowed funds, including loans, bonds, or lines of credit, typically shown as an expense on the income statement.