The Authority That an Agent Has Because the Principal Leads

question 31

Multiple Choice

The authority that an agent has because the principal leads third parties to believe that the agent has it is called

• A) implied authority.
• B) customary authority.
• C) apparent authority.
• D) none of these.

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Definitions:

Marginal Tax Rate

The tax rate applied to an additional dollar of income, representing the rate at which your next dollar of income will be taxed.

Cost Of Debt

The effective rate that a company pays on its total debt, indicating the average return that lenders demand for borrowing their capital.

Capital Structure

Capital structure refers to the mix of equity, debt, and other financing sources a company uses to fund its operations and growth.

Optimal Capital Structure

The best combination of debt, preferred, and equity financing that maximizes a company’s stock price by minimizing its cost of capital.