Question

Which of the following statements is CORRECT? Group of answer choices Relative to proprietorships, corporations generally face fewer regulations, and they also find it easier to raise capital. Stockholders should generally be happier than bondholders to have managers invest in risky projects with high potential returns as opposed to safe projects with lower expected returns. One disadvantage of operating as a corporation rather than as a partnership is that corporate shareholders are exposed to more personal liability than are partners. There is no good reason to expect a firm's stockholders and bondholders to react differently to the types of assets in which it invests.'

Answer 1

Answer:

Stockholders should generally be happier than bondholders to have managers invest in risky projects with high potential returns as opposed to safe projects with lower expected returns.

Explanation:

NOTE THIS TERMS

✓Stockholders is also regarded as shareholders, it could be individual or institution having one or more share of stock in a coporation (public or private) and it must be a legal deal.

✓bondholders are investor participating in bond securities.

From the question the correct statement is "Stockholders should generally be happier than bondholders to have managers invest in risky projects with high potential returns as opposed to safe projects with lower expected returns"

This is true because any profit made from the share of stock, the Stockholders have their own dividend there, but bondholders irrespective of profit made, their own interests is fixed. Hence,more profits are attributed Stockholders.