Which of the Following Statements Is False

question 7

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:

Domestic Work

Domestic Work refers to the tasks and activities conducted within the home, such as cleaning, cooking, child care, and managing household affairs, often performed without pay by family members or by hired personnel.

Demographic Structure

Refers to the composition of a population, including aspects such as age, sex, and distribution across geographical regions.

Aging Parents

Pertains to the demographic trend and individual experiences related to the increasing age of parental figures, focusing on their health, care needs, and the changing dynamics within families.

Gender Identity

An individual's personal sense of their own gender, which may or may not correspond to the sex assigned at birth.