Which of the Following Statements Is CORRECTσ

question 21

Multiple Choice

Which of the following statements is CORRECTσ

• A) the main method of transferring ownership interest in a corporation is by means of a hostile takeover.
• B) two key advantages of the corporate form over other forms of business organization are unlimited liability and limited life.
• C) a corporation is a legal entity that is generally created by a state; its life and existence is separate from the lives of its individual owners and managers.
• D) limited liability of its stockholders is an advantage of the corporate form of organization, but corporations have more trouble raising money in financial markets because of the complexity of this form of organization.
• E) although its stockholders are insulated by limited legal liability, the corporation's legal status does not protect the firm's managers in the same way; i.e., bondholders can sue its managers if the firm defaults on its debt, even if the default is the result of poor economic conditions.

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Definitions:

Arbitrator

The third party in the arbitration procedure whose job is to settle the dispute.

Demands

Requests or claims, typically forceful, for something considered due or legally owed.

Binding Decision

A decision, ruling, or judgment that is final and enforceable by law, requiring the parties involved to comply.

Discovery

A pre-trial procedure in a lawsuit where each party can obtain evidence from the other party or parties by means of discovery devices such as interrogatories, depositions, requests for production of documents.