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 firms in which it has more cash flow rights.

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Definitions:

Unipolar Depression

A profound depressive disorder identified by perpetual feelings of sorrow or an indifference to the external environment.

Persistent Depressive Disorder

A chronic form of unipolar depression marked by ongoing and repeated symptoms of either major or mild depression.

Dysthymic Syndrome

A chronic form of depression with less severe symptoms than major depression, but lasting for a longer period, often years.

Catatonic Depression

A subtype of depression characterized by periods of inability to move or speak, along with traditional symptoms of depression.