Question 1

List and describe the four rights of directors as listed in the text.

Accepted Answer

The rights of compensation,participation...

Question 2

What are the requirements for being a director?

Accepted Answer

Almost anyone can become a director.The ...

Question 3

Which of the following was the result on appeal in Auerbach v.Bennett the case in the text in which a shareholder brought a derivative action after an internal audit of the GTE Corporation suggested that the corporation's management had paid significant amounts in bribes and kickbacks over a period of several years?

Accepted Answer

A)   The court ruled that the business judgment rule exempted the directors from liability.
B)   The court ruled that the business judgment rule exempted the directors from liability only so long as the directors could establish that the shareholders did not lose money on account of their actions.
C)   The court ruled that the business judgment rule exempted the directors from liability unless the shareholder could establish that the shareholders lost money on account of their actions.
D)   The court ruled that the business judgment rule did not apply because illegality was involved and that the corporation was, therefore, liable.
E)   The court ruled that the business judgment rule shielded the lawsuit insofar as foreign wrongdoing was alleged, but not for wrongdoing committed in the U.S.F) C) and D)
G) A) and B)

Question 4

How many votes will the minority shareholders have in the election?

Accepted Answer

A)   2,000
B)   4,000
C)   6,000
D)   10,000
E)   20,000F) A) and B)
G) A) and C)

Question 5

Is Tina correct in that officers cannot be held criminally responsible for their actions on behalf of a corporation?

Accepted Answer

A)   Yes, she is correct.
B)   She is correct only so long as the corporation is solvent.
C)   She is correct only if the board of directors has accepted all liability for acts of officers.
D)   She is correct only if environmental or employment matters are involved.
E)   She is incorrect.F) C) and D)
G) A) and E)

Question 6

Which of the following may be redeemed for a certain number of shares at a specified price within a given time period?

Accepted Answer

A)   Preemptive shares
B)   Share allowances
C)   Allocated shares
D)   Stock warrants
E)   Share grantsF) A) and B)
G) A) and E)

Question 7

Which of the following references shares that have a fixed face value noted on the stock certificate?

Accepted Answer

A)   No par-value shares
B)   Par-value shares
C)   Watered stock
D)   Valued stock
E)   No-valued stockF) A) and B)
G) A) and E)

Question 8

In most states,a corporation's bylaws can negate preemptive rights.

Accepted Answer

A) True 
 B)False

Question 9

Each director has one vote.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is a term for stock issued to individuals below its fair market value?

Accepted Answer

A)   No-par stock
B)   Reduced stock
C)   Watered stock
D)   Less-value stock
E)   Unapproved stockF) B) and E)
G) B) and C)

Question 11

An individual shareholder can enter a voting trust in which he or she transfers share titles to a trustee in exchange for a ____.

Accepted Answer

A)   Voting trust certificate
B)   Proxy
C)   Voting acknowledgement
D)   Trustee voting agreement
E)   Trust acknowledgementF) D) and E)
G) C) and E)

Question 12

Generally,a quorum of shareholders exists when shareholders holding more than ______ percent of the outstanding shares are present.

Accepted Answer

A)   80
B)   70
C)   60
D)   50
E)   25F) A) and B)
G) A) and D)

Question 13

Shares are ______ when the corporation will not issue physical stock certificates.

Accepted Answer

A)   Approved
B)   Unapproved
C)   Unacknowledged
D)   Acknowledged
E)   UncertificatedF) B) and C)
G) B) and E)

Question 14

The Revised Model Business Corporation Act forbids directors' meetings being held via telephone.

Accepted Answer

A) True 
 B)False

Question 15

In a closely held corporation,a breach of the duty of a majority shareholder to act with care and loyalty when selling his or her shares is known as ____.

Accepted Answer

A)   Oppressive conduct
B)   Majority holder misconduct
C)   Minority oppression
D)   Minority discrimination
E)   Disloyal procedureF) C) and E)
G) A) and D)

Question 16

What duty,if any,did Wendy violate?

Accepted Answer

A)   She did not commit any violation.
B)   She violated the duty of loyalty.
C)   She violated the duty of care.
D)   She violated the duty of understanding.
E)   She violated the duty of profit maximization.F) A) and B)
G) B) and D)

Question 17

Directors and officers have a fiduciary duty of care.

Accepted Answer

A) True 
 B)False

Question 18

How much must a shareholder who signs a stock subscription pay for no-par shares?

Accepted Answer

A)   The depreciated value
B)   The value on the last sale
C)   The value as set by the board of directors
D)   The value as voted upon by shareholders
E)   The fair market value of the sharesF) A) and B)
G) C) and D)

Question 19

Which of the following was the result on appeal in the Case Opener,the case in which a majority shareholder voted to award a bonus to her son,the president of the company,over the objection of minority shareholders?

Accepted Answer

A)   That in awarding the bonus, the majority shareholder violated the duty of loyalty she owed to the company.
B)   That in awarding the bonus, the majority shareholder violated the duty of care she owed to the company.
C)   That in awarding the bonus, the majority shareholder violated the business judgment rule.
D)   That the majority shareholder was guilty of no violation in awarding the bonus.
E)   That the majority shareholder's vote to award the bonus would be upheld only if she submitted additional proof that the bonus was deserved.F) B) and E)
G) C) and E)

Question 20

Which of the following is a term for a requirement that a minimum number of directors be present at a meeting for decisions made at the meeting to be valid?

Accepted Answer

A)   Quorum
B)   Substantial group
C)   Adequate group
D)   Adequate assembly
E)   Substantial assemblyF) A) and D)
G) A) and E)

Exam 39: Corporations: Directors, Officers, and Shareholders

Shares are ______ when the corporation will not issue physical stock certificates.

Correct Answer
verified

Which of the following is a term for stock issued to individuals below its fair market value?

Correct Answer
verified

The Revised Model Business Corporation Act forbids directors' meetings being held via telephone.

Correct Answer
verified

Which of the following references shares that have a fixed face value noted on the stock certificate?

Correct Answer
verified

In most states,a corporation's bylaws can negate preemptive rights.

Correct Answer
verified

In a closely held corporation,a breach of the duty of a majority shareholder to act with care and loyalty when selling his or her shares is known as ____.

Correct Answer
verified

Which of the following is a term for a requirement that a minimum number of directors be present at a meeting for decisions made at the meeting to be valid?

Correct Answer
verified

Is Tina correct in that officers cannot be held criminally responsible for their actions on behalf of a corporation?

Correct Answer
verified

Which of the following was the result on appeal in the Case Opener,the case in which a majority shareholder voted to award a bonus to her son,the president of the company,over the objection of minority shareholders?

Correct Answer
verified

An individual shareholder can enter a voting trust in which he or she transfers share titles to a trustee in exchange for a ____.

Correct Answer
verified

List and describe the four rights of directors as listed in the text.

Correct Answer
verified
The rights of compensation,participation...
View Answer

Directors and officers have a fiduciary duty of care.

Correct Answer
verified

What duty,if any,did Wendy violate?

Correct Answer
verified

What are the requirements for being a director?

Correct Answer
verified
Almost anyone can become a director.The ...
View Answer

How much must a shareholder who signs a stock subscription pay for no-par shares?

Correct Answer
verified

Generally,a quorum of shareholders exists when shareholders holding more than ______ percent of the outstanding shares are present.

Correct Answer
verified

How many votes will the minority shareholders have in the election?

Correct Answer
verified

Correct Answer
verified

Which of the following may be redeemed for a certain number of shares at a specified price within a given time period?

Correct Answer
verified

Each director has one vote.

Correct Answer
verified

Exam 39: Corporations: Directors, Officers, and Shareholders

Shares are ______ when the corporation will not issue physical stock certificates.

Correct AnswerverifiedShow Answer

Which of the following is a term for stock issued to individuals below its fair market value?

Correct AnswerverifiedShow Answer

The Revised Model Business Corporation Act forbids directors' meetings being held via telephone.

Correct AnswerverifiedShow Answer

Which of the following references shares that have a fixed face value noted on the stock certificate?

Correct AnswerverifiedShow Answer

In most states,a corporation's bylaws can negate preemptive rights.

Correct AnswerverifiedShow Answer

In a closely held corporation,a breach of the duty of a majority shareholder to act with care and loyalty when selling his or her shares is known as ____.

Correct AnswerverifiedShow Answer

Which of the following is a term for a requirement that a minimum number of directors be present at a meeting for decisions made at the meeting to be valid?

Correct AnswerverifiedShow Answer

Is Tina correct in that officers cannot be held criminally responsible for their actions on behalf of a corporation?

Correct AnswerverifiedShow Answer

Which of the following was the result on appeal in the Case Opener,the case in which a majority shareholder voted to award a bonus to her son,the president of the company,over the objection of minority shareholders?

Correct AnswerverifiedShow Answer

An individual shareholder can enter a voting trust in which he or she transfers share titles to a trustee in exchange for a ____.

Correct AnswerverifiedShow Answer

List and describe the four rights of directors as listed in the text.

Correct AnswerverifiedThe rights of compensation,participation...View AnswerShow Answer

Directors and officers have a fiduciary duty of care.

Correct AnswerverifiedShow Answer

What duty,if any,did Wendy violate?

Correct AnswerverifiedShow Answer

What are the requirements for being a director?

Correct AnswerverifiedAlmost anyone can become a director.The ...View AnswerShow Answer

How much must a shareholder who signs a stock subscription pay for no-par shares?

Correct AnswerverifiedShow Answer

Generally,a quorum of shareholders exists when shareholders holding more than ______ percent of the outstanding shares are present.

Correct AnswerverifiedShow Answer

How many votes will the minority shareholders have in the election?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following may be redeemed for a certain number of shares at a specified price within a given time period?

Correct AnswerverifiedShow Answer

Each director has one vote.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The rights of compensation,participation...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Almost anyone can become a director.The ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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