Joe Entered a Store and Approached a Display of China

question 68

Multiple Choice

Joe entered a store and approached a display of china. He was examining an extremely valuable vase and carelessly dropped it, destroying it. Which of the following is correct with respect to his liability?

• A) If the store has insurance coverage, the insurance will cover his careless conduct and he doesn't have to worry about anything.
• B) If the store has insurance coverage, the insurance will pay the store for the loss but may pursue Joe for repayment by suing him for negligence.
• C) Joe cannot be sued for the loss because Joe is not a party to the insurance contract.
• D) If the store does not have insurance coverage, they should have and so Joe has no responsibility in these circumstances.
• E) Joe is responsible only if the store has no insurance coverage.

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds, represented as the interest payable on any type of debt.

Dividend Yield

A financial ratio that indicates how much a company pays out in dividends each year relative to its stock price.

Return on Stockholders' Equity

A measure of the profitability of a corporation in terms of the equity held by its shareholders, indicating how efficiently a company uses its equity base to generate profit.

Net Income

The total profit of a company after all revenues and gains are added together and all expenses and losses are subtracted.