Which of the Following Statements Is CORRECT

question 2

Multiple Choice

Which of the following statements is CORRECT?

• A) Hostile takeovers are most likely to occur when a firm's stock is selling below its intrinsic value as a result of poor management.
• B) The efficiency of the U.S.economy would probably be increased if hostile takeovers were absolutely forbidden.
• C) The managers of established,stable companies sometimes attempt to get their state legislatures to remove rules that make it more difficult for raiders to succeed with hostile takeovers.
• D) In general,it is more in bondholders' interests than stockholders' interests for a firm to shift its investment focus away from safe,stable investments and into risky investments,especially those that primarily involve research and development.
• E) Stockholders in general would be better off if managers never disclosed favorable events and therefore caused the price of the firm's stock to sell at a price below its intrinsic value.

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Definitions:

Prosocial Manner

Behaving in a way that is positive, helpful, and intended to promote social acceptance and friendship.

Free Will

The ability of individuals to make choices that are not determined by prior causes or by divine intervention.

Absolute Free Will

The concept that individuals have complete control over their actions and decisions, without any constraints from fate, destiny, or predetermination.

Prosocial Manner

Behaviors that are positive, helpful, and intended to promote social acceptance and friendship.