Nina wants to buy and operate an ice-cream truck but does not have the financial resources to start the business. she borrows $5,000 from max to whom she promises to pay an interest rate of 7%, and gets another $10,000 from david to whom she promises a third of her profits. what best describes the situation?

David is a stockholder and Max is a bondholder.

Explanation:

Since David will share the net profit as for 1/3 rd share, he will be deemed as a shareholder as there is no promise to pay back the amount he lend although there is share in profits.

Also in case of Max he had paid $5,000, on which interest will be paid, basically interest is treated as an expense and a compulsion to incur even in case of loss.

Accordingly Max posses to hold a bond with interest of 7% on face value of $5,000. On the other hand David holds equity share worth of $10,000 and the share is 1/3 rd in profits.

explanation: doctrine of respondeat superior is a legal doctrine that is commonly used in tort. this principle makes an employer or principal legally responsible for the wrongful acts done by an employee or agent, if such acts occur within the scope of the employment or agency.

the correct option is c