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.

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Definitions:

Debt Management

The process of overseeing and handling the debt obligations of an individual or organization, including repayment strategies and structuring.

Return on Total Assets

A profitability ratio that measures the net income earned on total assets available within a company.

Net Income Before Taxes

This refers to the amount of revenue remaining after all operating expenses, interest, and depreciation have been subtracted, but before taxes are deducted.

Acid Test Ratio

A financial metric that measures a company's ability to pay off its short-term liabilities with its quick assets.