Which One of the Following Statements Is TRUE

question 26

Multiple Choice

Which one of the following statements is TRUE?

• A) an example of asset switching is when a company borrows for a new manufacturing facility but then uses it to repurchase its own stock.
• B) an example of an agency cost is when an attorney hires an expert witness for a trial.
• C) the commission required by the federal housing agency for a small business loan is an example of an agency cost.
• D) an example of an agency cost is the salary of the agent hired to work for the principal.
• E) creditors have a claim on a firm's earning stream through the dividend payments they receive.

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Definitions:

Manifest Function

The recognized and intended consequences of any social pattern, which contribute to its function in society.

Dysfunction

In sociology, a component of society that may disrupt the social system or reduce its stability.

Social Life

The part of an individual's time that is spent interacting with others in informal or structured social settings.

Sociologist

A scientist who specializes in sociology, focusing on the systematic study of social behavior and societal structures.