Which of the Following Statements Is CORRECT

question 60

Multiple Choice

Which of the following statements is CORRECT?

• A)One disadvantage of organizing a business as a corporation rather than a partnership is that the equity investors in a corporation are exposed to unlimited liability.
• B)Using restrictive covenants in debt agreements is an effective way to reduce conflicts between stockholders and managers.
• C)Managers generally welcome hostile takeovers since the "raider" generally offers a price for the stock that is higher than the price before the takeover action started.
• D)The managers of established, stable companies sometimes attempt to get their state legislatures to impose rules that make it more difficult for raiders to succeed with hostile takeovers.
• E)Most business in the U.S. is conducted by corporations, and corporations' popularity results primarily from their favorable tax treatment.

---

Definitions:

Power Elite

A small group of powerful individuals at the top of the political, military, and economic institutions who hold significant influence over the decision-making processes in society.

Economic Positions

The status or place of individuals or groups within the economic structure of society, influenced by factors like income, wealth, and occupation.

Political Action Committees

Organizations that collect funds from members and donate those funds to campaign for or against political candidates, legislation, or policies.

Legitimate Right

A recognized or sanctioned entitlement or authority within a social or legal framework.