Which of the Following Statements Is False

question 1

Multiple Choice

Which of the following statements is false?

• A)If management does not consider the needs of the bondholders of a firm, they could end up destroying shareholder value.
• B)In a perfect capital market, if a firm's current capital structure is not optimal, one can expect that firm to be a takeover target.
• C)Management should focus only on the needs of a firm's shareholders since they are the true owners of the firm and, as such, they elect the firm's directors.
• D)If management chooses to ignore the needs of bondholders when structuring a firm, the firm can be expected to have to pay a higher interest rate on its debt.

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Definitions:

Accounts Receivable

Amounts owed to a business by its customers for goods or services delivered but not yet paid for.