Which of the Following Constitutes Default

question 68

Multiple Choice

Which of the following constitutes default?

• A)repaying a debt before it is due
• B)bankruptcy of the debtor
• C)increase of rate of interest by the creditor midway through debt repayment
• D)theft of the collateral

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Definitions:

Noncontrolling Interest

An ownership interest in a subsidiary not attributable, directly or indirectly, to the parent company, reflecting the equity in a subsidiary not owned by the parent.

Subsidiary

A company that is controlled by another company, known as a parent company, through the ownership of more than half of its voting stock.

Stock Dividend

A distribution of extra shares to shareholders, as opposed to a cash payment, as a form of dividend.

Common Stock

A type of equity security that represents ownership in a corporation, usually carrying voting rights and potential dividends.