Which of the Following Statements Is Correct

question 72

Multiple Choice

Which of the following statements is correct?

• A) The major disadvantage of organizing as a corporation is that it does not provide its owners with limited liability.
• B) Bond covenants,or restrictions on debt,are an important device to reduce agency conflicts between stockholders and bondholders.
• C) The threat of a hostile takeover serves to reduce agency conflicts between stockholders and bondholders.
• D) Compensation packages are designed,in part,to reduce agency conflicts between shareholders and managers.
• E) Both answers b and d are correct.