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:

Hybridization

Refers to the concept in chemistry where atomic orbitals mix to form new hybrid orbitals, providing an explanation for molecular shape and bonding properties.

Indicated Atom

An atom within a molecule which is highlighted or specified for discussion or analysis.

Acrylonitrile

An organic compound that is a colorless volatile liquid, used in the manufacture of plastics, adhesives, and synthetic rubber.

σ Bonds

Single covalent bonds resulting from the head-on overlap of atomic orbitals and involving two electrons, characterized by their high strength and rotation around the bond axis.