Shawn Purchases a Computer from Adelaide Electronics,and Writes Them a Check

question 37

Multiple Choice

Shawn purchases a computer from Adelaide Electronics,and writes them a check of $1,000.However,after Shawn brought the computer home,it abruptly stopped working due to a virus attack.Shawn calls his bank ordering a stop-payment on the check.Adelaide Electronics gave the check to Jack Enterprises,their creditor.Shawn's bank honored the check when Jack presented it.Which of the following is true in this case?

• A) The bank is liable to recredit Shawn's account,since the bank did not follow Shawn's instructions.
• B) Shawn will be able to show that he sustained losses since the bank honored the check to Jack.
• C) The bank is not liable to recredit Shawn's account,since Shawn did not send the stop-payment order well in advance.
• D) Shawn cannot have his account recredited because he will not be able to show that he sustained any loss.

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Definitions:

Dividend Growth Rate

The dividend growth rate is the annualized percentage rate of growth that a particular stock's dividend undergoes over a period of time.

Annual Dividend

The total amount of dividend payments made to shareholders in a year, reflecting the company’s profitability and its distribution policy.

Coupon Rate

The annual interest payment on a bond, denoted as a percentage of its face value.

After-Tax Cost of Debt

The interest expense on debt adjusted for taxes, reflecting the actual cost to the company.