Coppersmith Executed and Delivered Negotiable Notes to the Payee, Charlene

question 31

Essay

Coppersmith executed and delivered negotiable notes to the payee, Charlene. The payee indorsed the notes to Whitehurst but did not deliver them. Instead, she kept the notes in her possession because she wanted to collect the interest during her life and wanted the indorsee to have the notes on her death. After Charlene's death, her executor, Cartwright, found the notes. Both Cartwright and Whitehurst sought to enforce the notes against Coppersmith. Who was entitled to do so?

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Definitions:

Cost of Equity

The return a company requires to decide if an investment meets capital return requirements, often estimated using the Capital Asset Pricing Model (CAPM).

Pre-Tax Cost of Debt

The rate of return that a company pays on its debt, before taking into account tax deductions.

Face Value

The nominal value printed on a bond or security which indicates its worth at maturity but does not necessarily reflect its market value.

Weighted Average Cost of Capital (WACC)

The average rate of return a company is expected to pay its shareholders and debt holders, weighted according to the proportion of equity and debt in the company's capital structure.