An agreement whereby one party to a contract is discharged and another party becomes obligated is

A. an accord and satisfaction.
B. a reformation.
C. a novation.
D. a rescission.

Answer: C. a novation.

Business

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According to the residual dividend payout policy, dividends are considered a residual after

A) investment financing needs have been met. B) preferred stock is issued. C) EPS is allocated. D) retained earnings are financed.

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