Which of the Following Statements Is CORRECT

question 1

Multiple Choice

Which of the following statements is CORRECT?

• A) Corporations generally are subject to fewer regulations and more favorable tax treatment than sole proprietorships and partnerships. This is why corporations do most of the business in the United
• States.
• B) Managers who face the threat of hostile takeovers are less likely to pursue policies that maximize shareholder value than are
• Managers who do not face the threat of hostile takeovers.
• C) One advantage of the corporate form of organization is that liability of the owners of the firm is limited to their investment
• In the firm.
• D) Because of their simplified organization, it is easier for sole proprietorships and partnerships to raise large amounts of outside
• Capital than it is for corporations.
• E) Bond covenants are an effective way to resolve conflicts between shareholders and managers.

---

Definitions:

Bigger Words

Complex or longer words typically used to express more sophisticated concepts or to impress an audience.

Business Writing

Professional communication that includes reports, emails, proposals, and memos, focused on clear and concise information exchange in a corporate context.

Major Sections

The primary divisions within a document or presentation that organize and categorize content, such as chapters in a book or sections in a report.

Transitions

The process or period of changing from one state or condition to another.