John Was Driving His Car in a Careless Way, Failing

question 2

Essay

John was driving his car in a careless way, failing to drive as a reasonably prudent person would under the driving conditions. Ramona was crossing the street in a careless way, failing to cross as a reasonably prudent person would. John struck and injured Ramona with the car John was driving. At trial, it was determined that John was 80 percent at fault and that Ramona was 20 percent at fault. The injuries sustained amounted to $100,000. Explain how much, if any, recovery Ramona would receive in a state that applies the contributory negligence rule. Do the same thing for a state that applies the comparative negligence rule.

---

Definitions:

Annual Coupon

The yearly interest payment made to bondholders, typically expressed as a percentage of the face value.

Bankruptcy Claims

Rights to payment held by creditors from a company undergoing bankruptcy proceedings.

Debt/equity Ratio

The proportionality ratio of debt to equity in the context of funding a company's assets.

Optimal Capital Structure

The best mix of debt, equity, and other financial instruments that maximizes a company's value while minimizing its cost of capital.