Which One of the Following Statements Is TRUE

Multiple Choice

Which one of the following statements is TRUE?

A) Outside shareholders will pay less for stock if they think the original owners will consume perquisites.
B) Creditors have a claim on a firm's earning stream through the dividend payments they receive.
C) An example of asset switching is an option to exchange one piece of real estate for another.
D) An agency cost is the wage required to pay someone who is hired to perform a service.
E) An example of an agency cost is when an attorney hires an expert witness for a trial.