Which of the Following Statements Is False

question 29

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.

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Definitions:

Future Needs

Anticipated requirements or demands that may arise in the foreseeable future.

Entry Skill Levels

Refer to the initial qualifications or abilities that an individual must possess to undertake a specific job or role.

Training and Development

Activities aimed at enhancing the skills, knowledge, and competencies of employees to improve their job performance.

Organizational Climate

The overall environment and atmosphere within a company, based on employees' perceptions and feelings about the work setting.