The Major Difference Between a Check and a Draft Is

question 3

Multiple Choice

The major difference between a check and a draft is that:

• A)the draft is not drawn on the bank but on the issuer.
• B)the bank must present the draft to the firm for acceptance.
• C)after acceptance of the draft the firm must deposit the funds to make payment.
• D)All of the above.
• E)None of the above.

Recognize the importance of leverage and its impact on corporate value.

Understand the principal-agent relationship and agency issues within a corporation.

Apply the corporate valuation model to estimate the value of operations and the price per share of a company.

Understand the effect of dividend policy on the application of the corporate valuation model.

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Definitions:

Condition

A stipulation or prerequisite in a contract or agreement that must be met for the agreement to be fully enforceable.

Off-campus Neighborhoods

Residential areas located outside the boundaries of a college or university campus, often inhabited by students.

Operation Of Law

Legal changes that occur automatically due to existing laws, without the need for action by the parties involved.

Duty To Pay

The obligation to make payment for goods received, services rendered, or a debt incurred.