Which One of the Following Statements Is TRUE

question 29

Multiple Choice

Which one of the following statements is TRUE?

• A) One tool of corporate governance is how the company's charter affects the likelihood of a takeover.
• B) One tool of corporate governance is stock repurchases.
• C) One tool of corporate governance is a company's tax avoidance strategy.
• D) One tool of corporate governance is choosing a good investment banker.
• E) Creditors have a claim on a firm's earning stream through the dividend payments they receive.

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Definitions:

Autonomy

The right or condition of self-governance, or the ability of an individual or organization to make their own decisions independently.

Cost Center

A division whose parent company rewards it for reducing the cost of producing a specified output.

Minimizing Costs

The process of reducing expenses to the lowest possible level while maintaining the desired level of quality or output.

Division

A distinct part of a larger company or organization that focuses on a specific area of business or operation.