Which One of the Following Statements Is TRUE

question 38

Multiple Choice

Which one of the following statements is TRUE?

• A) An example of asset switching is when a company borrows for a new manufacturing facility but then uses it
• To repurchase its own stock.
• B) An example of an agency cost is when an attorney hires an expert witness for a trial.
• C) The commission required by the Federal Housing Agency for a small business loan is an example of
• An agency cost.
• D) An example of an agency cost is the salary of the agent hired to work for the principal.
• E) Creditors have a claim on a firm's earning stream through the dividend payments they receive.

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Definitions:

Remote Control Devices

Electronic devices used to operate another device from a distance, typically using radio frequency or infrared signals.

Fixtures

Items that are attached to a property in such a way that they become part of the property and are considered legally part of the real estate.

Joint Tenancy

An estate held by two or more jointly, with an equal right in all to share in the enjoyments of the land during their lives. An incident of joint tenancy is the right of survivorship.

Co-owners

Co-owners share joint ownership or possession of property or assets, each holding a portion of the rights, responsibilities, and benefits associated with the ownership.