Which One of the Following Statements Is TRUE

question 43

Multiple Choice

Which one of the following statements is TRUE?

• A) an example of an agency cost is when an outside investor is only willing to pay less for stockbecause she thinks the original owner will consume too many perquisites.
• B) an example of an agency cost is when the board of directors pays a dividend to shareholders.
• C) an example of an agency cost is when an attorney hires an expert witness for a trial.
• D) the commission required by the federal housing agency for a small business loan is an example ofan agency cost.
• E) an example of an agency cost is the salary of the agent hired to work for the principal.