Which of the Following Statements Is FALSE

question 38

Multiple Choice

Which of the following statements is FALSE?

• A) Controlling shareholders pay for their control rights because the firm effectively faces a higher cost of equity for outside capital.
• B) Most countries follow what is called the stakeholder model, giving explicit consideration to other stakeholders-in particular, rank-and-file employees.
• C) In a pyramid structure, a family first creates a company in which it owns more than 50% of the shares and therefore has a controlling interest.
• D) A conflict of interest arises because the family has an incentive to try to move profits (and hence dividends) down the pyramid-that is, toward companies in which it has few cash flow rights and away firms in which it has more cash flow rights.

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Definitions:

Dental Hygiene

The practice of keeping the mouth, teeth, and gums clean and healthy to prevent disease.

White Teeth

Refers to teeth that appear very light in color, often considered desirable in many cultures for cosmetic reasons.

Explanandum

The aspect of a phenomenon that is being explained, or the question that an explanation seeks to answer.

Complex

Consisting of many different and connected parts.