Question
Which of the following statement is correct? a. All the answers are incorrect. b. The cost of potential fire damage to a firms warehouses should
Which of the following statement is correct?
a. All the answers are incorrect.
b. The cost of potential fire damage to a firms warehouses should not include the potential loss of business that would occur if goods could not be shipped on time due to the fire.
c. The cost of risk is not equal to the cost of loss control plus the cost of internal risk reduction.
d. In the context of agency problem, market for corporate control (e.g., hostile takeovers) does not motivate managers to maximize shareholder value.
e. The cost of risk is not equal to the cost of direct losses that will be incurred by the firm due to the risk.
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