An Agent Who Commits a Tort That Injures a Third

question 14

Multiple Choice

An agent who commits a tort that injures a third party is personally liable for his or her actions, ________.

• A) but the principal can also be liable.
• B) only if the agent was on a mission for an identified principal or a partially disclosed principal.
• C) regardless of both the classification and the liability of the principal.
• D) but can also seek indemnification from the principal.
• E) only if the principal had the agent sign a waiver.

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Definitions:

Optimal Capital Structure

The ideal mix of debt and equity financing that minimizes a company's cost of capital and maximizes shareholder value.

Weighted Average Cost of Capital

A calculation of a firm's cost of capital that weights each category of capital proportionally, including equity and debt.

Market Price

The current value at which an asset or service can be bought or sold in the marketplace.

Financial Leverage

Taking on borrowed money to magnify the possible profits of an investment.