Which One of the Following Statements Is TRUE

question 17

Multiple Choice

Which one of the following statements is TRUE?

• A) outside shareholders will pay less for stock if they think the original owners will consume perquisites.
• B) creditors have a claim on a firm's earning stream through the dividend payments they receive.
• C) an example of asset switching is an option to exchange one piece of real estate for another.
• D) an agency cost is the wage required to pay someone who is hired to perform a service.
• E) an example of an agency cost is when an attorney hires an expert witness for a trial.