When Interpreting an Integrated Contract, a Court Will Exclude Parol

question 27

Multiple Choice

When interpreting an integrated contract, a court will exclude parol evidence in all of the following cases except:

• A) to add to the terms of a contract.
• B) to modify the terms of a contract.
• C) to contradict the terms of a contract.
• D) to show fraud.

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Definitions:

Financial Leverage

Rephrased: Utilizing debt to finance additional assets, with the aim of increasing returns to equity holders, while also increasing financial risk.

Interest Tax Shield

The decrease in what one owes in income taxes by removing the cost of debt interest from the taxable income figure.

Capital Structure Puzzle

The term refers to the challenge and debate over the optimal composition of a company's debt and equity financing to maximize its value.

Optimal Capital Structure

The best mix of debt, preferred stock, and common equity that maximizes a company’s stock price.