Which of the Following Statements Is False

question 46

Multiple Choice

Which of the following statements is false?

• A) In many other countries, the central conflict is between what are called "controlling shareholders" and "minority shareholders."
• B) Controlling shareholders can make decisions that benefit them disproportionately relative to the minority shareholders, such as employing family members rather than the most talented managers or establishing contracts favorable to other family controlled firms.
• C) As recent events and corporate scandals have shown, investor protection in the United States is generally seen as substandard when compared to the developed economies in the world.
• D) Much of the focus in the United States is on the agency conflict between shareholders, who own the majority of a firm but are a dispersed group, and managers, who own little of the firm and must be monitored.

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Definitions:

Appraisers

Professionals who estimate the value of property, such as real estate or fine art, often used for tax, insurance, or sale purposes.

Earnings per Share

A company's profit divided by its number of outstanding shares of stock, indicating the portion of a company's profit allocated to each share.

Cost of Debt

The effective rate that a company pays on its total debt, serving as a measure of the risk and a way to gauge the company's ability to manage its debt effectively.

Shares Outstanding

The total number of shares of a company’s stock that are currently owned by all its shareholders.