Ayush Owned Property Which He Discovered Was Contaminated with Hazardous

question 22

Multiple Choice

Ayush owned property which he discovered was contaminated with hazardous waste. He learned that Bayle Inc. had owned the property thirty years earlier, and had used it as a disposal site for manufacturing chemicals. Ayush also learned that Solly Trucking Inc. had hauled the chemicals to the site under contract with Bayle. Under these circumstances, which of the parties can be liable for the costs of cleaning up the site under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) ?

• A) Only Bayle is potentially liable under the CERCLA.
• B) Only Ayush is potentially liable under the CERCLA.
• C) Only Bayle and Solly are potentially liable under the CERCLA.
• D) Ayush, Bayle, and Solly are all potentially liable under the CERCLA.

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Definitions:

Optimal Capital Structure

The best mix of debt, equity, and other financial instruments that maximizes a company's value while minimizing its cost of capital.

Increased Benefit

An enhancement or improvement in the terms or amount of an insurance or investment product's payouts.

Bankruptcy Costs

Expenses and losses incurred during the process of declaring bankruptcy, including legal fees, loss of creditworthiness, and potential asset liquidation.

M&M Proposition I

The value of the firm is independent of its capital structure.