Which of the Following Statements Is True of Illegal Sales

question 4

Multiple Choice

Which of the following statements is true of illegal sales?

• A)If a sale is divisible with a legal and illegal part, then neither part is enforceable by the law.
• B)An indivisible sale with an illegal part makes the entire sale illegal.
• C)If a sale involves several separate items but it is a lump-sum sale, then the sale is considered divisible.
• D)If a party is completely innocent and has entered into an illegal sale, the court will not intervene to aid the party.

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Definitions:

Market Yield

The current rate of return anticipated on a bond if held until maturity, expressed as an annual percentage.

Component Cost

The cost related to each source of capital, such as debt and equity, that a company uses for funding.

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, usually with fixed dividends.

Cost of Retained Earnings

The opportunity cost for shareholders for having the company retain the earnings instead of distributing them, often considered in investment and dividend decisions.