Which of the Following Statements Is CORRECT

question 24

Multiple Choice

Which of the following statements is CORRECT?

• A) One disadvantage of operating as a corporation rather than as a partnership is that corporate shareholders are exposed to more personal liability than partners.
• B) There is no good reason to expect a firm's stockholders and bondholders to react differently to the types of new asset
• Investments a firm makes.
• C) Bondholders are generally more willing than stockholders to have managers invest in risky projects with high potential returns as
• Opposed to safer projects with lower expected returns.
• D) Stockholders are generally more willing than bondholders to have managers invest in risky projects with high potential returns as
• Opposed to safer projects with lower expected returns.
• E) Relative to sole proprietorships, corporations generally face fewer regulations, and this makes it easier for corporations to raise
• Capital.

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Definitions:

Economic Downturns

A period of reduced economic activity characterized by decreased GDP, employment, and spending.

PR Departments

Units within organizations dedicated to managing and guiding the public relations efforts, strategies, and campaigns.

Marketing Department

A division within an organization responsible for developing strategies to promote and sell products or services to customers.

Multinational Corporation

A large company that operates in several countries around the world, managing production or delivering services in more than one country.