An Enforceable Contract Is Made by an Adult with a Minor

question 3

Multiple Choice

An enforceable contract is made by an adult with a minor. Which of the following is most likely to hold true in this case?

• A)The contract is enforceable against the adult but not against the minor.
• B)The contract is enforceable against the minor but not against the adult.
• C)The contract is not enforceable against either of the parties until the minor attains a majority.
• D)The contract is enforceable against the adult only if the minor ratifies the contract.

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Definitions:

Bond Issue

The process by which a company, government, or other organization raises funds by issuing bonds to investors, who essentially lend money to the issuer in exchange for periodic interest payments and the return of principal at maturity.

Weight of Debt

A component of a firm's capital structure that quantifies the proportion of total capital represented by debt.

Weighted Average Cost of Capital

A calculation of a company's cost of capital in which each category of capital is proportionately weighted, used to evaluate the cost of funding projects.

Bond Issue

The process by which a company or government raises funds by selling bonds to investors, which then are obliged to pay back with interest.