Which of the Following Statements Is CORRECT

question 9

Multiple Choice

Which of the following statements is CORRECT?

• A) Corporations face few regulations and more favorable tax treatment than do proprietorships and partnerships.
• B) Managers who face the threat of hostile takeovers are less likely to pursue policies that maximize shareholder value compared to managers who do not face the threat of hostile takeovers.
• C) Bond covenants are an effective way to resolve conflicts between shareholders and managers.
• D) Because of their simplified organization,it is easier for proprietors and partnerships to raise large amounts of outside capital than it is for corporations.
• E) One advantage to forming a corporation is that the owners of the firm have limited liability.

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Definitions:

Domestication

The process of adapting wild plants and animals for human use, such as for food, clothing, or companionship.

Pastoralism

A form of agriculture focused on the raising of livestock in pastoral, or grassy, regions.

Agriculture

The practice of cultivating the land, producing crops, and raising livestock for food, fiber, and other products.

Gini Index

A measure of the distribution of income across a population used to gauge economic inequality.