Which of the Following Statements Is CORRECT

question 14

Multiple Choice

Which of the following statements is CORRECT?

• A) A good goal for a firm's management is the maximization of expected EPS.
• B) Most business in the U.S.is conducted by corporations,and corporations' popularity results primarily from their favorable tax treatment.
• C) Conflicts can exist between stockholders and managers,but potential conflicts are reduced by the possibility of hostile takeovers.
• D) Corporations and partnerships have an advantage over proprietorships because a proprietor is exposed to unlimited liability,but the liability of all investors in the other types of businesses is more limited.
• E) For a stock to be in equilibrium,its intrinsic value must be greater than the actual market price.

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Definitions:

Organizational Risk

Refers to the potential for losses or other adverse outcomes that an organization may face due to various internal and external factors.

Strategic Risk

Involves risks that affect the long-term goals, direction, and overall strategy of an organization.

Contractual Risks

The potential for losses or liabilities arising from the terms and conditions of a contract, including breaches, misinterpretations, and the failure of parties to fulfill their obligations.

People Risks

Risks associated with the individuals involved in a project or business, such as skill shortages, personality conflicts, or turnover.