Which of the Following Statements Is CORRECT

question 7

Multiple Choice

Which of the following statements is CORRECT?

• A) Corporations generally are subject to more favorable tax treatment and fewer regulations than partnerships and sole proprietorships, which 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.

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Definitions:

Situational Adjustment

The process by which an individual is molded by the group into which he or she is seeking acceptance. The person learns from the group how to continue successfully in a situation.

Sociologist

A social scientist who studies human societies, their interactions, and the processes that preserve and change them.

Kubler-Ross's Stages

A model describing five stages of emotional response to grief and loss, including denial, anger, bargaining, depression, and acceptance.

Dying Process

The dying process refers to the final phase of a living organism's life, culminating in death, and may involve physiological, psychological, and social changes.