Lou, an Attorney, Allows a Statute of Limitations to Lapse

question 31

Multiple Choice

Lou, an attorney, allows a statute of limitations to lapse on a claim by Metal Fabrication Company, a client. Lou

• A)can be held liable for malpractice.
• B)has violated an ethical standard but cannot be held liable.
• C)is subject to criminal penalties under the statute of limitations.
• D)will be automatically disbarred.

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Definitions:

Coupon Rate

The yearly interest rate paid on a bond, shown as a percentage of its nominal value.

Interest Tax Shield

The reduction in income taxes that results from taking allowable deductions for interest expense.

Tax Shield

The reduction in income taxes that results from taking an allowable deduction from taxable income, such as mortgage interest or depreciation.

Coupon Rate

Yearly rate of interest paid on a bond, expressed in terms of percentage of its face value.