Which of the Following Statements Is CORRECT

question 9

Multiple Choice

Which of the following statements is CORRECT?

• A) Corporations face few regulations and more favorable tax treatment than do proprietorships and partnerships.
• B) Managers who face the threat of hostile takeovers are less likely to pursue policies that maximize shareholder value compared to managers who do not face the threat of hostile takeovers.
• C) Bond covenants are an effective way to resolve conflicts between shareholders and managers.
• D) Because of their simplified organization,it is easier for proprietors and partnerships to raise large amounts of outside capital than it is for corporations.
• E) One advantage to forming a corporation is that the owners of the firm have limited liability.

---

Definitions:

Inventory Purchase

The acquisition of goods and materials a company intends to sell or use in the production process.

Amount Record

The documentation of the monetary value of transactions or balances.

Settlement Date

The date on which a trade of financial instruments is finalized, with the transfer of securities and funds between parties.

Transaction Date

The date on which an actual trade or financial deal occurs.