On november 5, hayes, inc., a small subcontractor, opened an account with basic corp., a carrier of construction materials. hayes promised to pay its bills within 30 days of purchase. although hayes purchased a substantial quantity of goods on credit from basic, it made few payments on the account until the following march, when it paid basic over $21,000. on march 14, hayes filed a voluntary petition under chapter 7.

why did hayes pay basic in march? does the bankruptcy trustee have a right to recover this payment? is it fair to hayes’ other creditors if basic is allowed to keep the $21,000? it is fair to hayes if hayes is forced to return $21,000?

Which of the following statements is correct? stockholders should generally be happier than bondholders to have managers invest in risky projects with high potential returns as opposed to safe projects with lower expected returns. potential conflicts between stockholders and bondholders are increased if a firm's bonds are convertible into its common stock. takeovers are most likely to be attempted if the target firm’s stock price is above its intrinsic value. one advantage of operating a business as a corporation is that stockholders can deduct their pro rata share of the taxes the firm pays, thereby eliminating the double taxation investors would face in a partnership.