Mike Authorizes His Agent,Ben to Borrow a Sum of $10,000

question 82

Multiple Choice

Mike authorizes his agent,Ben to borrow a sum of $10,000 on his behalf from the National Bank.Ben signs his name to a note without disclosing that the signature was on behalf of Mike.Who is liable on the note?

• A)Only Mike is liable.
• B)National Bank is liable.
• C)Both of them are liable.
• D)Only Ben is liable.

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Definitions:

Embedded Debt Cost

The implicit interest cost contained within a leasing agreement, reflecting the leasing company's financing charges.

Cost of Equity

The return that investors expect for investing in a company's equity, representing the compensation for risk.

Dividend Payment

A portion of a company's profits distributed to shareholders, typically on a quarterly basis.