Which of the Following Statements Is CORRECTσ

question 2

Multiple Choice

Which of the following statements is CORRECTσ

• A) a good goal for a firm's management is maximization of expected eps.
• B) most business in the u.s. is conducted by corporations, and corporations' popularity results primarily from their favorable tax treatment.
• C) because most stock ownership is concentrated in the hands of a relatively small segment of society, firms' actions to maximize their stock prices have little benefit to society.
• D) corporations and partnerships have an advantage over proprietorships because a sole proprietor is exposed to unlimited liability, but the liability of all investors in the other types of businesses is more limited.
• E) the potential exists for agency conflicts between stockholders and managers.

---

Definitions:

Role Ambiguity

Occurs when someone is uncertain about what is expected of him or her.

Accommodation

A strategy of conflict resolution where one party gives in to the demands or viewpoints of the other, often to maintain harmony.

Horizontal Conflict

Describes disagreements or disputes between individuals or groups at the same level in an organizational hierarchy or structure.

Manifest Conflict

A disagreement or clash that is openly expressed and observable by others.