Question 1

Management buyouts commonly make extensive use of borrowed funds.

Accepted Answer

A) True 
 B)False

Question 2

A sale of substantially all of the assets of a corporation in the ordinary course of business of the corporation will not require shareholder approval.

Accepted Answer

A) True 
 B)False

Question 3

When purchasers are willing to pay a premium for a block of shares that conveys control, almost all courts today
require the controlling shareholders to turn over this control premium to the corporation's treasury.

Accepted Answer

A) True 
 B)False

Question 4

If Yeron Corporation buys all of the assets of Aeron Corporation:

Accepted Answer

A) Yeron becomes a parent corporation. 
B) Aeron is merged into Yeron. 
C) Aeron's board is dissolved and replaced by Yeron's. 
D) None of these. 
A) Yeron becomes a parent corporation. 
B) Aeron is merged into Yeron. 
C) Aeron's board is dissolved and replaced by Yeron's. 
D) None of these.

Question 5

A consolidation:

Accepted Answer

A) has precisely the same result as a merger. 
B) is the most typical form of business combination used today. 
C) is always illegal (in contrast to mergers, which are legal under state law). 
D) requires the assent of the board of directors and shareholders of each corporation. 
A) has precisely the same result as a merger. 
B) is the most typical form of business combination used today. 
C) is always illegal (in contrast to mergers, which are legal under state law). 
D) requires the assent of the board of directors and shareholders of each corporation.

Question 6

The Revised Act takes the position that consolidations are, for all practical purposes, obsolete.

Accepted Answer

A) True 
 B)False

Question 7

A court may dissolve a corporation in a proceeding by a shareholder if it has established that:

Accepted Answer

A) the directors are deadlocked in the management of the corporate affairs. 
B) the acts of the directors or those in control of the corporation are illegal, oppressive, or fraudulent. 
C) the shareholders are deadlocked and have failed to elect directors for at least two consecutive annual meetings. 
D) All of these. 
A) the directors are deadlocked in the management of the corporate affairs. 
B) the acts of the directors or those in control of the corporation are illegal, oppressive, or fraudulent. 
C) the shareholders are deadlocked and have failed to elect directors for at least two consecutive annual meetings. 
D) All of these.

Question 8

The attorney general of the state of incorporation may bring a court action to dissolve a corporation if the corporation obtained its charter by fraud or if the corporation continues to exceed or abuse the authority that was conferred on it.

Accepted Answer

A) True 
 B)False

Question 9

The management of Corporation A forms Corporation B in which management owns some stock and institutional investors own the rest.Corporation B issues bonds to institutional investors to raise cash, with which it purchases the assets or stock of Corporation A.The assets of Corporation A are used as security for the bonds.This action by management is best described as a:

Accepted Answer

A) leveraged buyout. 
B) cash-out combination. 
C) short-form merger. 
D) compulsory share exchange. 
A) leveraged buyout. 
B) cash-out combination. 
C) short-form merger. 
D) compulsory share exchange.

Exam 36: Fundamental Changes

Management buyouts commonly make extensive use of borrowed funds.

A sale of substantially all of the assets of a corporation in the ordinary course of business of the corporation will not require shareholder approval.

When purchasers are willing to pay a premium for a block of shares that conveys control, almost all courts today require the controlling shareholders to turn over this control premium to the corporation's treasury.

If Yeron Corporation buys all of the assets of Aeron Corporation:

A consolidation:

The Revised Act takes the position that consolidations are, for all practical purposes, obsolete.

A court may dissolve a corporation in a proceeding by a shareholder if it has established that:

The attorney general of the state of incorporation may bring a court action to dissolve a corporation if the corporation obtained its charter by fraud or if the corporation continues to exceed or abuse the authority that was conferred on it.

Introduction to Law

Business Ethics and the Social Responsibility of Business

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance, Breach, and Discharge

Contract Remedies

Relationship of Principal and Agent

Relationship With Third Parties

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Products Liability: Warranties and Strict Liability in Tort

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transfers

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature, Formation, and Powers

Financial Structure

Management Structure

Secured Transactions and Suretyship

Bankruptcy

Protection of Intellectual Property

Antitrust

Consumer Protection

Employment Law

Securities Regulation

Accountants Legal Liability

Environmental Law

International Business Law

Introduction to Property, Property Insurance, Bailments, and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Decedents Estates

51: The Legal Environment Of Business

52: Contracts.

53: Agency.

54: Sales

55: Negotiable Instruments

56: Unincorporated Business Association

57: Corporations

58: Debtor and Creditor Relation

59: Regulation of Business

60: Property.

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