Agency by Estoppel Means

question 167

Multiple Choice

Agency by estoppel means:

• A) conduct on the part of the agent that implies an agency relationship must be stopped as soon as the principal implies disagreement
• B) actions by the principal lead a person to believe that the presumed agent has authority to act on the principal's behalf
• C) the agent creates an appearance of authority in the principal which leads a third party to reasonably conclude that the agent has the authority to perform certain acts
• D) conduct by the agent through word or actions is not sufficient to bind the principal to contracts the agent creates
• E) none of the other choices

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Definitions:

ROA

Return on Assets, a financial ratio indicating the profitability of a company relative to its total assets, measuring how effectively the company is using its assets to generate earnings.

Debt-Equity Ratio

The indicator displaying the equivalent contribution of equity and debt to a company's asset base financing.

Sustainable Growth Rate

The maximum rate at which a company can grow its revenues and profits without needing to increase financial leverage.

Debt-Equity Ratio

An indicator of a firm's use of financial debt, found by dividing the total amount of liabilities by the equity owned by stockholders.