Which one of the following statements is TRUE?

Question

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Asset switching refers to a situation where a company borrows funds for one purpose but then uses it for another purpose. In this case, the company borrowed money for a new manufacturing facility but used it to buy back its own stock, which is an example of asset switching. The other options are incorrect. B is an example of an agency problem where the attorney may hire an expert witness who may not work in the best interest of the client. C is incorrect as the federal housing agency's commission is a fee charged for a service rendered. D is incorrect as the salary of an agent is not an agency cost but a cost of doing business. E is incorrect as creditors have a claim on the firm's assets, not on its earning stream.

Which One of the Following Statements Is TRUE