Which of the Following Statements Is CORRECT

question 13

Multiple Choice

Which of the following statements is CORRECT?

• A) The main method of transferring ownership interest in a corporation is by means of a hostile takeover.
• B) Two key advantages of the corporate form over other forms of business organization are unlimited liability and limited life.
• C) A corporation is a legal entity that is generally created by a state; its life and existence is separate from the lives of its individual owners and managers.
• D) Limited liability of its stockholders is an advantage of the corporate form of organization, but corporations have more trouble raising money in financial markets because of the complexity of this form of organization.
• E) Although its stockholders are insulated by limited legal liability, the corporation's legal status does not protect the firm's managers in the same way; i.e., bondholders can sue its managers if the firm defaults on its debt, even if the default is the result of poor economic conditions.

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Definitions:

Do Your Best Goal

A motivational objective that encourages individuals to perform at their maximum capability without setting a specific performance target.

Expectancy Theory

A motivation theory suggesting that individuals are likely to act in a certain way based on the expectation that the act will be followed by a given outcome and the attractiveness of that outcome.

Instrumentality

The perceived relationship between performance and the attainment of desired outcomes, in the context of motivation theory.

Equity Theory

A concept in social psychology that suggests individuals determine the fairness of their job outcomes by comparing themselves to others.