Question 1

A merger occurs when one corporation enters into a permanent business partnership with another corporation.

Accepted Answer

A) True 
 B)False

Question 2

The duty of loyalty requires directors and officers to subordinate their personal interests to those of the corporation and its shareholders.

Accepted Answer

A) True 
 B)False

Question 3

________ are a panel of decision makers who are elected by the shareholders.

Accepted Answer

A)  Registered agents 
B)  Corporate officers 
C)  Stakeholders 
D)  Board of directors 
A)  Registered agents 
B)  Corporate officers 
C)  Stakeholders 
D)  Board of directors

Question 4

The board of directors makes policy decisions concerning the operation of a corporation.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following policies helps a corporate officer from being sued for honest mistakes made on behalf of a corporation?

Accepted Answer

A)  duty of loyalty 
B)  duty of obedience 
C)  business judgment rule 
D)  self-dealing 
A)  duty of loyalty 
B)  duty of obedience 
C)  business judgment rule 
D)  self-dealing

Question 6

Shareholders have unlimited liable for the debt and obligations of a corporation.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following must be included in the articles of incorporation?

Accepted Answer

A)  The minutes of the first organizational meeting of the board of directors. 
B)  The number of shares the corporation is authorized to issue. 
C)  The dissolution terms of the incorporation. 
D)  The corporate seal must be used in the articles of incorporation. 
A)  The minutes of the first organizational meeting of the board of directors. 
B)  The number of shares the corporation is authorized to issue. 
C)  The dissolution terms of the incorporation. 
D)  The corporate seal must be used in the articles of incorporation.

Question 8

________ is a preferred stockholder right to be paid a stated dollar amount if a corporation is dissolved and its assets redistributed.

Accepted Answer

A)  Noncumulative preference 
B)  Cumulative dividend preference 
C)  Dividend preference 
D)  Liquidation preference 
A)  Noncumulative preference 
B)  Cumulative dividend preference 
C)  Dividend preference 
D)  Liquidation preference

Question 9

Usurping a corporate opportunity is a breach that can only be committed by a shareholder.

Accepted Answer

A) True 
 B)False

Question 10

In debt securities, the corporation is the debtor and the holder is the creditor.

Accepted Answer

A) True 
 B)False

Question 11

Give an account of publicly held and closely held corporation.

Accepted Answer

Publicly held corporations have many sha

Question 12

Which of the following has a fixed maturity date?

Accepted Answer

A)  bonds 
B)  common stock 
C)  cumulative preferred stock 
D)  participating preferred stock 
A)  bonds 
B)  common stock 
C)  cumulative preferred stock 
D)  participating preferred stock

Question 13

Which of the following is true of a C Corporation?

Accepted Answer

A)  It doesn't pay tax at the corporate level. 
B)  Shareholders of such a corporation don't pay tax on their dividends. 
C)  It must have more than 100 shareholders. 
D)  Nonresident aliens cannot be shareholders. 
A)  It doesn't pay tax at the corporate level. 
B)  Shareholders of such a corporation don't pay tax on their dividends. 
C)  It must have more than 100 shareholders. 
D)  Nonresident aliens cannot be shareholders.

Question 14

A(n)________ is a debt security with a maturity of five years or less.

Accepted Answer

A)  bond 
B)  debenture 
C)  indenture 
D)  note 
A)  bond 
B)  debenture 
C)  indenture 
D)  note

Question 15

Shareholders of a corporation act as agents of the corporation.

Accepted Answer

A) True 
 B)False

Question 16

The shareholders are responsible for determining how much will be paid in dividends.

Accepted Answer

A) True 
 B)False

Question 17

A contract between a corporation and a holder that contains the terms of a debt security is known as a(n)________.

Accepted Answer

The answer of A contract between a corporation and a...

Question 18

The Inkilwas Corporation has 30,000 shares outstanding. A shareholders' meeting is duly called to amend the articles of incorporation, and 17,501 shares are represented at the meeting. According to the RMBCA, what is the minimum outstanding shares that must be represented in this case to have a quorum?

Accepted Answer

A)  12,001 
B)  18,501 
C)  15,001 
D)  17,501 
A)  12,001 
B)  18,501 
C)  15,001 
D)  17,501

Question 19

Once declared, a cash or property dividend cannot be revoked.

Accepted Answer

A) True 
 B)False

Question 20

What is a common stock? What are its features?

Accepted Answer

Common stock is an equity security that

Exam 16: Corporations and the Sarbanes-Oxley Act

A merger occurs when one corporation enters into a permanent business partnership with another corporation.

The duty of loyalty requires directors and officers to subordinate their personal interests to those of the corporation and its shareholders.

________ are a panel of decision makers who are elected by the shareholders.

The board of directors makes policy decisions concerning the operation of a corporation.

Which of the following policies helps a corporate officer from being sued for honest mistakes made on behalf of a corporation?

Shareholders have unlimited liable for the debt and obligations of a corporation.

Which of the following must be included in the articles of incorporation?

________ is a preferred stockholder right to be paid a stated dollar amount if a corporation is dissolved and its assets redistributed.

Usurping a corporate opportunity is a breach that can only be committed by a shareholder.

In debt securities, the corporation is the debtor and the holder is the creditor.

Give an account of publicly held and closely held corporation.

Which of the following has a fixed maturity date?

Which of the following is true of a C Corporation?

A(n)________ is a debt security with a maturity of five years or less.

Shareholders of a corporation act as agents of the corporation.

The shareholders are responsible for determining how much will be paid in dividends.

A contract between a corporation and a holder that contains the terms of a debt security is known as a(n)________.

Once declared, a cash or property dividend cannot be revoked.

What is a common stock? What are its features?

Legal Heritage and the Digital Age

Ethics and Social Responsibility of Business

Courts, Jurisdiction, and Administrative Agencies

Judicial, Alternative, and E-Dispute Resolution

Constitutional Law for Business and E-Commerce

Torts and Strict Liability

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Formation of Traditional and E-Contracts

Performance and Breach of Traditional and E-Contracts

E-Commerce and Digital Law

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Credit, Secured Transactions, and Bankruptcy

Small Business and General and Limited Partnerships

Limited Liability Companies, Limited Liability Partnerships, and Special Forms of Business

Investor Protection, E-Securities, and Wall Street Reform

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