Which of the Following Statements Is CORRECT

question 39

Multiple Choice

Which of the following statements is CORRECT?

• A) The main method of transferring ownership interest in a corporation is by means of a hostile takeover.
• B) Two key advantages of the corporate form over other forms of business organization are unlimited liability and limited life.
• C) A corporation is a legal entity that is generally created by a state; its life and existence is separate from the lives of its individual owners and managers.
• D) Limited liability of its stockholders is an advantage of the corporate form of organization, but corporations have more trouble raising money in financial markets because of the complexity of this form of organization.
• E) Although its stockholders are insulated by limited legal liability, the corporation's legal status does not protect the firm's managers in the same way; i.e., bondholders can sue its managers if the firm defaults on its debt, even if the default is the result of poor economic conditions.

---

Definitions:

Egalitarian Versus Hierarchical

A comparison between two systems of organization; one advocating for equal rights and opportunities, and the other for a ranked structure.

Trompenaars

A reference to Fons Trompenaars, a Dutch organizational theorist known for his work on cross-cultural communication and international management.

Person-Task Orientation

The focus on balancing personal interactions and task completion within an organization or team, maximizing both human and operational efficiency.

Power Distance

A cultural dimension that describes how people in a society deal with inequalities and the distribution of power.