Which One of the Following Statements Is TRUE

Multiple Choice

Which one of the following statements is TRUE?

A) Asset switching occurs when a company borrows money for a safe investment but uses it for a
Risky investment.
B) An example of an agency cost is when the board of directors pays a dividend to shareholders.
C) An example of an agency cost is when an attorney hires an expert witness for a trial.
D) The commission required by the Federal Housing Agency for a small business loan is an example of
An agency cost.
E) An example of an agency cost is the salary of the agent hired to work for the principal.