Which One of the Following Statements Is TRUE

question 5

Multiple Choice

Which one of the following statements is TRUE?

• A) lenders will protect themselves from asset switching by charging a higher interest rate.
• 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) lenders can't legally prevent a firm from engaging in asset switching.
• E) firms borrowing money have greater flexibility to use that money when there are debt covenants.

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Definitions:

Fatty Acids

Essential, long-chain hydrocarbons found in fats and oils, important for energy and cell functions.

Polyunsaturated

A type of fat found in plants and fish that contains more than one unsaturated carbon bond in its molecules, known to be beneficial for heart health.

Kilocalorie Intake

The total amount of energy consumed in the form of food or drinks, measured in kilocalories (also known as Calories), crucial for maintaining body functions and energy levels.

Energy Requirements

The amount of energy, measured in calories, that an individual needs to maintain their body weight and support daily activities.