Clare bought shares in ABC Corporation that were sold to her in violation of an SEC rule protecting investors. What remedies, if any, does Clare have if she wants to avoid the contract?
A. A court will grant no remedies because Clare is a party to an illegal contract.
B. Clare is entitled to a rescission of the contract because the rule that made the contract was intended to protect buyers like her.
C. Clare is entitled to restitution of the money she paid for the shares
Answer:
B. Clare is entitled to a rescission of the contract because the rule that made the contract was intended to protect buyers like her.
C. Clare is entitled to restitution of the money she paid for the shares
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The required return on an asset is an increasing function of its nondiversifiable risk
Indicate whether the statement is true or false
A company has sales of $640,000, net profit after taxes of $23,000, a total asset turnover of 4.17 and an equity multiplier of 1.67. What is the return on equity?
A) 24% B) 9.0% C) 8.1% D) 4.5%