A _____ Is a Financial Contract in Which the Borrower

question 111

Multiple Choice

A _____ is a financial contract in which the borrower and the lender agree to certain conditions about repayment, operating policies, other borrowing activities while they are outstanding, and other provisions.

• A)preferred stock
• B)common stock
• C)paid-in-capital
• D)bond
• E)a restriction on retained earnings

---

Definitions:

Legitimate Power

The authority derived from a formal position or role within an organization, granting the ability to influence others' actions or decisions.

Referent Power

Referent power is a form of personal power that stems from being admired, respected, and liked by others, often leading to influence through the desire of others to be associated with the person.

Legitimate Power

The authority that a person or a position holds, which is recognized as rightful by those they govern or lead, often derived from official or formal roles.

Expert Power

The influence and authority one possesses as a result of one's experience, skills, or knowledge in a specific area.