Which One of the Following Statements Is TRUE

question 31

Multiple Choice

Which one of the following statements is TRUE?

• A) an inside director is a board member who also holds a managerial position in the company.
• 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) company sponsorship of a local charity is an example of a nonpecuniary benefit.

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Definitions:

Bond Indenture

A legal contract between a bond issuer and bondholders detailing the characteristics of the bond, such as its maturity date, coupon rate, and payment schedule.

Bond Issuer

An entity, such as a corporation or government, that creates and sells bonds to finance its projects and operations.

Fiscal Year

A one-year period used for financial reporting and budgeting purposes, which does not necessarily align with the calendar year.

Semiannual Interest

Interest that's computed and disbursed semi-annually, commonly associated with bonds and loans.