Equity Contracts

question 14

Multiple Choice

Equity contracts

• A)are claims to a share in the profits and assets of a business.
• B)have the advantage over debt contracts of a lower costly state verification.
• C)are used much more frequently to raise capital than are debt contracts.
• D)are not subject to the moral hazard problem.

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Definitions:

Consequences

Outcomes or results that follow from an action or condition, often with implications for responsibility and decision-making.

Psychoanalytic Theories

A set of theories which focus on the unconscious motivations that shape personality and behavior, originally developed by Sigmund Freud.

Biological Theories

Concepts that explain phenomena or behavior strictly in terms of biological processes and heredity.

John Watson

An American psychologist and one of the founders of behaviorism, known for his theory that human behavior can be studied and modified through conditioning.