Mabel Is 84 Years Old and on Most Days Is

question 7

Multiple Choice

Mabel is 84 years old and on most days is mentally incompetent although she has not been adjudged insane.She has some days when she is fully aware mentally.On one of her good days,Mabel agreed to buy a five-year subscription to a wrestling magazine.Can Mabel avoid this contract?

• A) no, because it was entered into at a time when Mabel was mentally competent
• B) no, because it is for necessary educational purposes
• C) yes, but only if she disaffirms when she is not mentally competent
• D) yes, because this contract is void and never came into existence
• E) yes, because this contract is voidable at Mabel's election

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Definitions:

Floatation Costs

Expenses incurred by a company in issuing new securities, including underwriting fees and registration fees.

WACC

Weighted Average Cost of Capital - a measure of a firm's cost of capital in which each category of capital is proportionately weighted.

WACC

stands for Weighted Average Cost of Capital, which is a calculation of a firm's capital cost from all sources, including equity and debt, weighted accordingly.

Capital Asset Pricing Model

A model used to determine the theoretical rate of return of an asset, considering risk and the time value of money.