Fact Pattern 39-1

question 15

Multiple Choice

Fact Pattern 39-1
Cardio, Inc., makes and sells Drawdown, the most prescribed name-brand heart medication. Emitate Corporation has the potential to make a generic version of the same drug.
-Refer to Fact Pattern 39-1. Cardio pays Emitate not to sell its product. This is

• A) a customer restriction.
• B) a joint venture.
• C) an exclusive-dealing contract.
• D) a price-fixing agreement.

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Definitions:

Warrants

Financial derivatives that give the holder the right, but not the obligation, to buy or sell a security (usually equity) at a certain price before expiration.

Federally Registered

Designation indicating that an entity or activity has been officially recorded or acknowledged by the federal government.

Capital

Financial assets or resources that individuals or organizations use to fund their operations and invest in their future growth.

Company's Shares

Units of ownership interest in a corporation or financial asset, providing a portion of the company's profits and a claim on its assets to the shareholders.