Which of the Following Statements Is False

question 27

Multiple Choice

Which of the following statements is false?

• A)Creditors do not have voting power.
• B)Payment on interest on debt in considered an expense, while payment of dividends is a
• Return on capital.
• C)Unpaid debt is a liability of the firm, and if not paid, can result in liquidation of the firm.
• Unpaid ordinary equity dividends cannot force liquidation.
• D)One of the costs of issuing equity is the possibility of financial distress, while no financial
• Distress is associated with debt.
• E)None of the above.

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Definitions:

Baiting

involves luring someone by offering something enticing but not intending to deliver as promised, often used in deceptive marketing practices.

Truth in Lending Act

A federal law designed to protect consumers in credit transactions by requiring clear disclosure of key terms of the lending arrangement and all costs.

FTC Adjudicative Proceeding

A legal process by the Federal Trade Commission to resolve complaints against businesses violating consumer protection laws.

Deceptive Conduct

Deceptive conduct involves misleading or dishonest behavior designed to trick or deceive others, often scrutinized in the context of consumer protection and business practices.