Which One of the Following Statements Is TRUE

Multiple Choice

Which one of the following statements is TRUE?

A) An example of asset switching is when a company borrows for a new manufacturing facility but then uses it
To repurchase its own stock.
B) An example of an agency cost is when an attorney hires an expert witness for a trial.
C) The commission required by the Federal Housing Agency for a small business loan is an example of
An agency cost.
D) An example of an agency cost is the salary of the agent hired to work for the principal.
E) Creditors have a claim on a firm's earning stream through the dividend payments they receive.