Which of the Following Statements Is FALSE

question 2

Multiple Choice

Which of the following statements is FALSE?

• A)Leverage can reduce the degree of managerial entrenchment because managers are more likely to be fired when a firm faces financial distress.
• B)When a firm is highly levered,creditors themselves will closely monitor the actions of managers,providing an additional layer of management oversight.
• C)According to the empire building hypothesis,leverage increases firm value because it commits the firm to making future interest payments,thereby reducing excess cash flows and wasteful investment by managers.
• D)Managers of large firms tend to earn higher salaries,and they may also have more prestige and garner greater publicity than managers of small firms.As a result,managers may expand (or fail to shut down)unprofitable divisions,pay too much for acquisitions,make unnecessary capital expenditures,or hire unnecessary employees.

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Definitions:

Area 3b

A region of the primary somatosensory cortex involved in processing sensory information from the body, especially related to touch.

Responsive Neurons

Responsive neurons are nerve cells that activate or respond to specific stimuli, such as light, touch, or sound, contributing to sensory processing and perception.

Homunculus

A representation often used to illustrate the neurological "map" of the body parts in the brain, especially in the motor and sensory cortices.