Which One of the Following Statements Is TRUE

question 33

Multiple Choice

Which one of the following statements is TRUE?

• A) inside directors are likely to side with the ceo since they are employees.
• B) in a classified board, it is easier for dissidents to gain representation since fewer seats are up for election each year.
• C) inside directors are more concerned with shareholders' interests since they are more closely concerned with firm operations.
• D) since outside directors have no other connection with the firm, they are indebted to the ceo for putting them on the board.
• E) the more members of a board of directors, the better its function.

---

Definitions:

Goodwill

An intangible asset representing the excess of the purchase price over the fair market value of an acquired company's identifiable net assets, reflecting the value of its brand, customer relationships, and other non-physical assets.

Fair Value

The amount one would expect to obtain from selling an asset or the cost to transfer a liability in a smooth transaction among market players as of the valuation date.