Lynn Baily paid $150,000 for 3,000 shares in Baily Inc., a company for which she is the managing director.She also personally guaranteed a bank loan to Baily Inc.in the amount of $75,000.If Baily Inc.goes bankrupt, which of the following statements is correct?
A) Lynn's financial risk is unlimited.
B) Lynn's financial risk is limited to $75,000.
C) Lynn's financial risk is limited to $150,000.
D) Lynn's financial risk is limited to $225,000.
Correct Answer:
Verified
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