Which of the Following Statements Is FALSE

question 33

Multiple Choice

Which of the following statements is FALSE?

• A)In bankruptcy,management is given the opportunity to reorganize the firm and renegotiate with debt holders.
• B)Because a corporation is a separate legal entity,when it fails to repay its debts the people who lent to the firm,the debt holders,are entitled to seize the assets of the corporation in compensation for the default.
• C)As long as the corporation can satisfy the claims of the debt holders,ownership remains in the hands of the equity holders.
• D)If the corporation fails to satisfy debt holders' claims,debt holders may lose control of the firm.

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Definitions:

Levy

An imposed tax, charge, or fine on an individual or a company by a government or authoritative body.

Consumption

Refers to the total amount of goods and services that households and individuals buy and use within an economy.

Complements

Products or services that are used together, enhancing the value or demand of each other when consumed in combination.

Mortgages

Loans specifically designed for purchasing real estate, where the property itself serves as collateral until the loan is paid off.