Which One of the Following Statements Is TRUE

question 50

Multiple Choice

Which one of the following statements is TRUE?

• A) When lenders protect themselves from the risk of asset switching, the firm's WACC can increase.
• 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) An example of asset switching is an option to exchange one piece of real estate for another.
• E) Lenders can't legally prevent a firm from engaging in asset switching.

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Definitions:

Acquired Immunodeficiency Syndrome

A chronic, potentially life-threatening condition caused by the human immunodeficiency virus (HIV) which damages the immune system.

Altered Immune

A state in which the immune system's ability to fight infectious disease and cancer is compromised or changed.

Asymptomatic Immune

Refers to an immune response or condition in which the individual does not exhibit observable symptoms despite having an infection or disease.

T-Cell Count

A measure of the number of T-cells, a type of white blood cell important for the immune system, in a cubic millimeter of blood, used to monitor immune function, especially in HIV/AIDS.