Exam 19: Corporations

A board of directors is considering whether to invest a great deal of money into research and development.Such a decision could have a long-term beneficial effect for the company's future.As an alternative,the board could forego the expenditure into research and development and buy back its own shares in order to immediately increase the company's reserves.Which of the below groups would most likely favor the option to increase the company's reserves and not invest in more research and development?

Moreno is the CEO and Dalton is the CFO of the Sells Corporation,a public corporation which has been in business for eight years.Moreno and Dalton failed to personally certify the company's financial statements.Under the Sarbanes-Oxley Act:

Terminating a corporation is a three-step process: dissolution,winding up,and termination.

The "business judgment rule" has been abandoned in most states.

Which of the following is correct concerning anti-takeover efforts?

To be successful in a court challenge regarding an executive's compensation,shareholders must prove that:

Owners of preferred stock typically have a preference in liquidation.

Corporate debt:

Foster,Asher,and Jefferies are the incorporators of Moreland,Inc.They will elect the first set of directors.

Shareholder proposals on the company proxy statement:

The Williams Act regulates tender offers only if the target company's stock is publicly traded.

Maureen,a shareholder of Metra,Inc.,was unhappy with how the corporation was being managed.Maureen wanted to be a member of Metra's board of directors.Which statement is correct?

What are some of the advantages for a business to incorporate in Delaware?

Shareholders have the authority to manage the corporate business.

The proceeds,if any,of a derivative lawsuit go to:

Sara decided to incorporate her business under the name Loro,Inc.Before Loro was incorporated,Sara signed a contract in the name of Loro,Inc.to lease a storefront.Sara did not tell the other party that Loro was not yet formed.Sara is personally liable on the lease.

Fashions,Inc.has 52 shareholders.There is no shareholder agreement concerning the board of directors.The company is subject to the Model Act.How many directors is Fashions,Inc.required to have?

One of the directors of Independent Pallet Mill purchases 100 acres of timberland.In order for him to sell the timber from this land to Independent,what must he do? If he does not act properly in this situation,what duty would he violate,and what would be the result?

In the late 1960s a shareholder of the company that owned the Chicago Cubs baseball team sued the company because the directors refused to install lights in Wrigley Field.The court decided that the directors:

Laurie is incorporating her business.The business's home state is Wisconsin.Business will be conducted in California,Michigan,Pennsylvania,and Virginia.Laurie: