Discuss the revocability of assignments
When an assignee gives consideration in exchange for an assignment, a contract exists between the assignor and the assignee. Consequently, the assignor may not revoke the assignment without the assignee's assent. In contrast, a gratuitous assignment is revocable by the assignor and is terminated by the assignor's death, incapacity, or subsequent assignment of the right unless the assignor has made an effective delivery of the assignment to the assignee. A gratuitous assignment is also made irrevocable if, before the attempted revocation the donee-assignee receives payment of the claim from the obligor, obtains a judgment against the obligor, or obtains a new contract with the obligor.
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Erin was shopping for an aluminum extension ladder. She was surprised by the number of safety labels on the ladders at her local hardware store. The store clerk explained that the manufacturers put these labels on the ladders in an attempt to avoid a lawsuit based on ________.
A. defect in design B. defect in manufacture C. defect in packaging D. failure to warn
Which of the following statements is CORRECT?
A. When firms are deciding on the size of stock splits--say whether to declare a 2-for-1 split or a 3-for-1 split, it is best to declare the smaller one, in this case the 2-for-1 split, because then the after-split price will be higher than if the 3-for-1 split had been used. B. Back before the SEC was created in the 1930s, companies would declare reverse splits in order to boost their stock prices. However, this was determined to be a deceptive practice, and reverse splits are illegal today. C. Stock splits create more administrative problems for investors than stock dividends, especially determining the tax basis of their shares when they decide to sell them, so today stock dividends are used far more often than stock splits. D. When a company declares a stock split, the price of the stock typically declines--for example, by about 50% after a 2-for-1 split--and this necessarily reduces the total market value of the firm's equity. E. If a firm's stock price is quite high relative to most stocks--say $500 per share--then it can declare a stock split of say 20-for-1 so as to bring the price down to something close to $25. Moreover, if the price is relatively low--say $2 per share--then it can declare a "reverse split" of say 1-for-10 so as to bring the price up to somewhere around $20 per share.
Blackwater Adventures has a bond issue outstanding that matures in sixteen years. The bonds pay interest semi-annually. Currently, the bonds are quoted at 103 percent of face value and carry a 9 percent coupon. The firm's tax rate is 34 percent
What is the firm's after-tax cost of debt? A) 5.19 percent B) 5.71 percent C) 7.86 percent D) 8.65 percent E) 11.41 percent
Suppose you borrowed the money you needed to purchase an automobile and then failed to make a scheduled payment by the due date. Technically, you
A) are bankrupt. B) are in default. C) are usually not given a chance to make good on the overdue payment. D) none of the above