Which of the Following Statements Is FALSE

question 20

Multiple Choice

Which of the following statements is FALSE?

• A)One disadvantage of using leverage is that it does not allow the original owners of the firm to maintain their equity stake.
• B)The separation of ownership and control creates the possibility of management entrenchment;facing little threat of being fired and replaced,managers are free to run the firm in their own best interests.
• C)Managers also have their own personal interests,which may differ from those of both equity holders and debt holders.
• D)The costs of reduced effort and excessive spending on perks are another form of agency cost.

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Definitions:

Production Quotas

Predetermined targets for the quantity of products that must be produced within a certain timeframe, often used to gauge productivity or assign tasks.

Decertification Elections

A process wherein the employees of a bargaining unit vote on whether to remove the union as their collective bargaining representative.

Union Representation

The act of being represented by a labor union or trade union in negotiations and legal matters with an employer.

Card-Signing Campaign

A union organizing strategy where employees sign cards indicating their support for union representation in the workplace.