Question 1

Gavin is a shareholder of Houseboats Inc.with preemptive rights.With these rights,he can​

Accepted Answer

A)  buy a prorated share of a new issue of stock before other buyers.
B)  choose to have the firm act exclusively in a certain area.
C)  preempt managerial decisions that affect shareholders.
D)  sell a prorated share of a new issue of stock before other sellers.E) None of the above
F) A) and B)

Question 2

Cumulative voting refers to the accumulation of proposals presented annually for a shareholders' vote.

Accepted Answer

A) True 
 B)False

Question 3

Roy,a director of Service & Sales Corporation,does not attend a board meeting for three years.During that time,Terry,the firm's president,makes improper loans that cost the company $10 million.Roy is most likely liable for breach of​

Accepted Answer

A)  the business judgment rule.
B)  the duty of care.
C)  the duty of loyalty.
D)  none of the choices.E) A) and D)
F) All of the above

Question 4

Mike is a shareholder of NatGas,Inc.NatGas uses cumulative voting to elect directors.This means that the number of Mike's votes is determined by the number of​

Accepted Answer

A)  years that he has been a shareholder.
B)  members of the board to be elected multiplied by the total number of voting shares that he holds.
C)  shareholders present at the shareholders' meeting.
D)  shareholders' meetings that he has attended.E) None of the above
F) B) and C)

Question 5

The board of directors makes corporate policy decisions.

Accepted Answer

A) True 
 B)False

Question 6

The board of Management Consultants,Inc. ,can delegate some of its responsibilities to​

Accepted Answer

A)  the firm's incorporators.
B)  the firm's officers.
C)  the firm's shareholders.
D)  no one.E) A) and D)
F) A) and B)

Question 7

Tech Talent,Inc. ,is a corporation.Techno Talent's implied powers enable it to​

Accepted Answer

A)  none of the choices.
B)  depart significantly from traditional corporate formalities.
C)  bind the corporation to an action that will greatly affect its purpose.
D)  borrow funds and lend funds.E) A) and C)
F) None of the above

Question 8

In most states,an individual can be an officer or a director of a corporation,but not both at the same time.

Accepted Answer

A) True 
 B)False

Question 9

Faye and Grant are shareholders of Hearthside Hotels,Inc.As shareholders,they must approve​

Accepted Answer

A)  a merger.
B)  a decision to pursue new business opportunities.
C)  none of the choices.
D)  a contract between management and labor.E) B) and C)
F) All of the above

Question 10

Bea transfers shares of stock that she owns in Coin Laundry Corporation to Dick.A shareholders' meeting takes place before his ownership is entered in the firm's stock book.A vote at the meeting can be cast by​

Accepted Answer

A)  Bea and Dick.
B)  Bea.
C)  Dick.
D)  none of the choices.E) C) and D)
F) A) and B)

Question 11

Neil,a majority shareholder of Oil Changes Inc. ,effectively excludes Polly,a minority shareholder,from the benefits of stock ownership in the firm.Polly can​

Accepted Answer

A)  assert the business judgment rule.
B)  bring a suit for damages.
C)  exercise de facto control.
D)  force a cumulative vote.E) A) and B)
F) All of the above

Question 12

Brad is a shareholder of Cloud Servers Inc.He will be deemed to have a fiduciary duty to Cloud and its minority shareholders if he has a sufficient number of shares to​

Accepted Answer

A)  assert the business judgment rule.
B)  bring a shareholder's derivative suit.
C)  exercise de facto control.
D)  participate in a cumulative vote.E) A) and C)
F) A) and D)

Question 13

Avery wants to go into business as Boom! to make and market fireworks.When deciding which form of business organization would be most appropriate,Avery would normally take into account all of the following except​

Accepted Answer

A)  the liability of the owners.
B)  the forms of competitors' business organizations.
C)  tax considerations.
D)  the need for capital.E) B) and C)
F) A) and C)

Question 14

Wings2Go Corporation fails to hold an organizational meeting.In this circumstance,Wings2Go is most likely​

Accepted Answer

A)  a corporation by estoppel.
B)  a de facto corporation.
C)  a de jure corporation.
D)  ultra vires.E) B) and C)
F) C) and D)

Question 15

Stocks represent the borrowing of funds by firms.

Accepted Answer

A) True 
 B)False

Question 16

A corporation cannot be formed for purposes other than making a profit.

Accepted Answer

A) True 
 B)False

Question 17

Ann is a corporate officer for Blooming Flora,Inc.As a corporate officer,Ann is​

Accepted Answer

A)  the head of the board of directors.
B)  an employee of the firm.
C)  the employer of the firm.
D)  in charge of approving the shareholders.E) B) and D)
F) None of the above

Question 18

The articles of incorporation serve as a primary source of authority for a corporation's business operations.

Accepted Answer

A) True 
 B)False

Question 19

Doris wants to form a new firm-eBeats-to market a new app.Fees are required to form all of the following business organizations except​

Accepted Answer

A)  a sole proprietorship.
B)  a corporation.
C)  a limited partnership.
D)  a limited liability company.E) All of the above
F) A) and B)

Question 20

A vacancy on the board of directors can be filled by the board itself.

Accepted Answer

A) True 
 B)False

Exam 18: Corporations

A vacancy on the board of directors can be filled by the board itself.

Correct AnswerverifiedShow Answer

Faye and Grant are shareholders of Hearthside Hotels,Inc.As shareholders,they must approve​

Correct AnswerverifiedShow Answer

Tech Talent,Inc. ,is a corporation.Techno Talent's implied powers enable it to​

Correct AnswerverifiedShow Answer

A corporation cannot be formed for purposes other than making a profit.

Correct AnswerverifiedShow Answer

Neil,a majority shareholder of Oil Changes Inc. ,effectively excludes Polly,a minority shareholder,from the benefits of stock ownership in the firm.Polly can​

Correct AnswerverifiedShow Answer

The board of Management Consultants,Inc. ,can delegate some of its responsibilities to​

Correct AnswerverifiedShow Answer

Ann is a corporate officer for Blooming Flora,Inc.As a corporate officer,Ann is​

Correct AnswerverifiedShow Answer

The board of directors makes corporate policy decisions.

Correct AnswerverifiedShow Answer

In most states,an individual can be an officer or a director of a corporation,but not both at the same time.

Correct AnswerverifiedShow Answer

Avery wants to go into business as Boom! to make and market fireworks.When deciding which form of business organization would be most appropriate,Avery would normally take into account all of the following except​

Correct AnswerverifiedShow Answer

Stocks represent the borrowing of funds by firms.

Correct AnswerverifiedShow Answer

The articles of incorporation serve as a primary source of authority for a corporation's business operations.

Correct AnswerverifiedShow Answer

Mike is a shareholder of NatGas,Inc.NatGas uses cumulative voting to elect directors.This means that the number of Mike's votes is determined by the number of​

Correct AnswerverifiedShow Answer

Gavin is a shareholder of Houseboats Inc.with preemptive rights.With these rights,he can​

Correct AnswerverifiedShow Answer

Wings2Go Corporation fails to hold an organizational meeting.In this circumstance,Wings2Go is most likely​

Correct AnswerverifiedShow Answer

Cumulative voting refers to the accumulation of proposals presented annually for a shareholders' vote.

Correct AnswerverifiedShow Answer

Bea transfers shares of stock that she owns in Coin Laundry Corporation to Dick.A shareholders' meeting takes place before his ownership is entered in the firm's stock book.A vote at the meeting can be cast by​

Correct AnswerverifiedShow Answer

Roy,a director of Service & Sales Corporation,does not attend a board meeting for three years.During that time,Terry,the firm's president,makes improper loans that cost the company $10 million.Roy is most likely liable for breach of​

Correct AnswerverifiedShow Answer

Doris wants to form a new firm-eBeats-to market a new app.Fees are required to form all of the following business organizations except​

Correct AnswerverifiedShow Answer

Brad is a shareholder of Cloud Servers Inc.He will be deemed to have a fiduciary duty to Cloud and its minority shareholders if he has a sufficient number of shares to​

Correct AnswerverifiedShow Answer

Correct Answer
verified

Faye and Grant are shareholders of Hearthside Hotels,Inc.As shareholders,they must approve

Correct Answer
verified

Tech Talent,Inc. ,is a corporation.Techno Talent's implied powers enable it to

Correct Answer
verified

Correct Answer
verified

Neil,a majority shareholder of Oil Changes Inc. ,effectively excludes Polly,a minority shareholder,from the benefits of stock ownership in the firm.Polly can

Correct Answer
verified

The board of Management Consultants,Inc. ,can delegate some of its responsibilities to

Correct Answer
verified

Ann is a corporate officer for Blooming Flora,Inc.As a corporate officer,Ann is

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Avery wants to go into business as Boom! to make and market fireworks.When deciding which form of business organization would be most appropriate,Avery would normally take into account all of the following except

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Mike is a shareholder of NatGas,Inc.NatGas uses cumulative voting to elect directors.This means that the number of Mike's votes is determined by the number of

Correct Answer
verified

Gavin is a shareholder of Houseboats Inc.with preemptive rights.With these rights,he can

Correct Answer
verified

Wings2Go Corporation fails to hold an organizational meeting.In this circumstance,Wings2Go is most likely

Correct Answer
verified

Correct Answer
verified

Bea transfers shares of stock that she owns in Coin Laundry Corporation to Dick.A shareholders' meeting takes place before his ownership is entered in the firm's stock book.A vote at the meeting can be cast by

Correct Answer
verified

Roy,a director of Service & Sales Corporation,does not attend a board meeting for three years.During that time,Terry,the firm's president,makes improper loans that cost the company $10 million.Roy is most likely liable for breach of

Correct Answer
verified

Doris wants to form a new firm-eBeats-to market a new app.Fees are required to form all of the following business organizations except

Correct Answer
verified

Brad is a shareholder of Cloud Servers Inc.He will be deemed to have a fiduciary duty to Cloud and its minority shareholders if he has a sufficient number of shares to

Correct Answer
verified