Question

Which of the following statements is true? Question 17 options: The separation of ownership and control...

Which of the following statements is true?

Question 17 options:

The separation of ownership and control has costs that almost always outweigh the benefits.

With the separation of ownership and control, decisions are made by managers while the benefits of the decisions accrue to the owners.

The owners of a firm are the only individuals who hold the firm?s shares.

The managers are residual claimants of the firm's profits.
Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer- Correct option is 'D'

''The managers are residual claimants of the firm's profits'', this statement is True. Manager is the sole of residual claimants on the firm's profit. Residual claimants is stated that if the member of the production team share the amount of revenue that is a function of the input of the member of the team, and the share of all but one of them is determined independently of the amount of revenue generated and then the remaining individual is the residual claimants, receiving whatever revenue is left after all contracts have been honored, including the payments to the other team members.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Indicate whether the following statements are (True) or (False) and correct the False statements: 1. The...
Indicate whether the following statements are (True) or (False) and correct the False statements: 1. The corporate treasurer typically handles both cost accounting and financial accounting. ( ) 2. Marginal analysis states that financial decisions should be made and actions taken only when added benefits are greater than zero. ( ) 3. The conflict between the goal of a firm’s owners and the goal of its non-owner managers is incompatibility. ( ) 4. The sale of either bonds or stocks...
Which of the following statements regarding limitations on internal control is true? options: Companies can design...
Which of the following statements regarding limitations on internal control is true? options: Companies can design a system of internal control that is foolproof. A well-designed internal control system is a luxury that few companies can afford. An entity's size has little effect on the degree of control that it can obtain. Human errors can weaken an internal control system.
Which two of the following five statements are correct? Select two alternatives: 1. While the protection...
Which two of the following five statements are correct? Select two alternatives: 1. While the protection of shareholder rights is a very important principle in Europe, in the US the stakeholder view of the corporation is most common. 2. The separation of ownership and control is perhaps the most important reason for the success of the corporate organizational form. Because any investor can hold an ownership stake in a corporation, investors are able to diversify and thus, with no costs,...
Which one of the following statements is correct? Question 5 options: 1) Shareholders' equity and debt...
Which one of the following statements is correct? Question 5 options: 1) Shareholders' equity and debt are the residual value of a firm. 2) Net working capital is always a positive value. 3) An increase in cash reduces the liquidity of a firm. 4) In a secondary market transaction, stocks are traded between existing shareholders.
Which of the following statements is true concerning the use of mergers to reduce cyclicality and...
Which of the following statements is true concerning the use of mergers to reduce cyclicality and volatility? I. The merger of large, public firms is a cost-effective way for shareholders to shed firm-specific risk due to cyclicality and volatility II. The merger of a large firm with a small, private firm may reduce cyclicality and volatility risk for the small firm's owner. III. Mergers that reduce cyclicality and volatility may still result in additional costs that outweigh the benefits Select...
Which of the following statements about common stock is false? Stockholders exercise control over the company...
Which of the following statements about common stock is false? Stockholders exercise control over the company by voting for board members. Common stockholders are the owners of for-profit corporations. The preemptive right gives current stockholders the right to purchase any new shares issued by the company. In the event of bankruptcy and liquidation, shareholders often receive nothing. The claim of shareholders on the cash flows of the firm is limited to the dividends that they receive—i.e., they have no claim...
17. Which of the following statements regarding the M&M Propositions is true? A)Without taxes, the firm's...
17. Which of the following statements regarding the M&M Propositions is true? A)Without taxes, the firm's capital structure is relevant.             B)   Without taxes, the optimal amount of leverage for a firm is zero debt. C)   With taxes, a firm can increase its value by reducing debt. D)   Once the tax effect is considered, there is a strictly increasing linear        relationship between the amount of debt and the firm value.
Q1 a) Which one of the following statements is true regarding financial slack? Financial Slack: allows...
Q1 a) Which one of the following statements is true regarding financial slack? Financial Slack: allows firms to take advantage of good investment opportunities is always associated with high leverage reduces agency problems for the firm increases the need for managers to seek external financing b) According to the Trade-Off Theory of Debt Policy, beyond a certain point of debt financing, increasing debt further will do all of the following  EXCEPT: cause stockholders to demand a higher return. cause investors to...
‏____ 17. Which of the following statements is CORRECT? a. It is usually easier to transfer...
‏____ 17. Which of the following statements is CORRECT? a. It is usually easier to transfer ownership in a corporation than it is to transfer ownership in a sole proprietorship. b. Corporate shareholders are exposed to unlimited liability. c. Corporations generally face fewer regulations than sole proprietorships. d. Corporate shareholders are exposed to unlimited liability, and this factor may be compounded by the tax disadvantages of incorporation. e. There is a tax disadvantage to incorporation, and there is no way...
Which statements are true in the following choice? Select all that apply. Question 3 options: A....
Which statements are true in the following choice? Select all that apply. Question 3 options: A. Lecture Notes topic: "Energy-Associated Regions" In line with the Law of Conservation of Energy, energy is neither created nor destroyed. It changes from one form to another or transferred from one region to another, but the total amount of energy is constant. The region in which the energy-associated event occurs is called the system, while the environment around the system is called the surroundings...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT