Which of the Following Statements Is FALSE

question 45

Multiple Choice

Which of the following statements is FALSE?

• A)The relationship between managerial ownership and firm value is unlikely to be the same for every firm,or even for different executives of the same firm.
• B)Even with the risk benefits of separating ownership and control,there are still examples of corporations in which the top managers have substantial ownership interests.
• C)Academic studies do not support the notion that greater managerial ownership is associated with fewer value-reducing actions by managers.
• D)While increasing managerial ownership may reduce perquisite consumption,it also makes managers harder to fire-thus reducing the incentive effect of the threat of dismissal.

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Definitions:

Public Accounting

The field of accounting that involves providing assurance, tax, and consulting services to the public, typically performed by certified public accountants (CPAs).

Revenue Recognition

Revenue recognition is an accounting principle that outlines the specific conditions under which revenue is recognized or accounted for.

Guidelines

Guidelines are recommendations or principles that aim to streamline certain processes or set standards.

Risk and Return

A financial concept indicating that the potential return on any investment is directly correlated with the level of risk taken.