Which of the Following Statements Is FALSE

question 7

Multiple Choice

Which of the following statements is FALSE?

• A)Controlling shareholders pay for their control rights because the firm effectively faces a higher cost of equity for outside capital.
• B)Most countries follow what is called the stakeholder model,giving explicit consideration to other stakeholders-in particular,rank-and-file employees.
• C)In a pyramid structure,a family first creates a company in which it owns more than 50% of the shares and therefore has a controlling interest.
• D)A conflict of interest arises because the family has an incentive to try to move profits (and hence dividends)down the pyramid-that is,toward companies in which it has few cash flow rights and away from firms in which it has more cash flow rights.

---

Definitions:

New Role Patterns

Entails the adoption of different or evolving behaviors and responsibilities in professional or social contexts, often in response to changes in the organizational or societal structure.

Appreciative Inquiry

A change management approach that focuses on identifying what is working well, analyzing why it is working well, and then doing more of it.

Driving Forces

Key factors or influences that propel an entity towards its goals or a specific direction of change.

Restraining Forces

Elements that hinder or limit the progress towards change or a desired outcome.