Which of the following statements is CORRECT?
A) A good goal for a firm's management is the maximization of expected EPS.
B) Most business in the U.S. is conducted by corporations, and corporations' popularity results primarily from their favorable tax treatment.
C) Conflicts can exist between stockholders and managers, but potential conflicts are reduced by the possibility of hostile takeovers.
D) Corporations and partnerships have an advantage over proprietorships because a sole proprietor is exposed to unlimited liability, but the liability of all investors in the other types of businesses is more limited.
E) Firms in highly competitive industries are more likely to consciously exercise "social responsibility" than are firms in oligopolistic industries.

Question

Quizplus · Accepted Answer

Conflicts can arise between stockholders and managers because they may have different goals or interests. However, the possibility of hostile takeovers can reduce these conflicts by holding managers accountable for their actions and decisions.

Which of the Following Statements Is CORRECT