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In: Finance

Which of the following statements is correct? a. Conflicts can exist between stockholders and managers, but...

Which of the following statements is correct?

a. Conflicts can exist between stockholders and managers, but potential conflicts are reduced by the possibility of hostile takeovers.

b. Most business in the U.S. is conducted by corporations, and corporations’ popularity results primarily from their favorable tax treatment.

c.The good goal for a firm’s management is the maximization of expected net income.

d. corporation have an advantage over proprietorships because a sole proprietor is exposed to unlimited liability, but the liability of all investors in corporation is more limited

e. more than one correct

Solutions

Expert Solution

Ans e. more than one correct.

Correct Statements are: a. Conflicts can exist between stockholders and managers, but potential conflicts are reduced by the possibility of hostile takeovers and corporation have an advantage over proprietorships because a sole proprietor is exposed to unlimited liability, but the liability of all investors in corporation is more limited.

Other statements are: The good goal for a firm’s management is the maximization of wealth of the shareholders.

jeff jeffy answered 2 years ago
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