Most Founders' Agreements Include a ________ Clause, Which Legally Obligates

question 67

Multiple Choice

Most founders' agreements include a ________ clause, which legally obligates the departing founder to sell to the remaining founders his or her interest in the firm if the remaining founders are interested.

• A) redemption
• B) buyback
• C) statutory purchase
• D) voluntary recoup
• E) shareholder surrender

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Definitions:

Annual Inflation Rate

The percentage increase in the price of goods and services over a one-year period, reflecting the decreasing purchasing power of a currency.

Purchasing Power

The measure of what one unit of currency can buy in terms of goods or services.

Compounded Monthly

The practice of calculating interest on the principal and the accumulated interest each month.

Compounded Semiannually

Interest that is calculated and added to the principal balance twice a year.