Question 1

Matt,a shareholder,can run for director by simply placing his name on the company's proxy statement.

Accepted Answer

A) True 
 B)False  False

Question 2

Meredith,a shareholder in Quarto,Inc.,notified Quarto's board of directors that the corporation had been wronged and asked the board to bring a lawsuit in the corporation's name.In response to Meredith's demand,the board

Accepted Answer

A) can file suit on behalf of the corporation. 
B) can reject Meredith's demand or simply fail to respond. 
C) can appoint a Special Litigation Committee. 
D) can do any of the above. 
A) can file suit on behalf of the corporation. 
B) can reject Meredith's demand or simply fail to respond. 
C) can appoint a Special Litigation Committee. 
D) can do any of the above. D

Question 3

If a public company decides not to solicit proxies for a shareholder meeting,it need not give shareholders the information that would have been required in a proxy statement.

Accepted Answer

A) True 
 B)False  False

Question 4

A proxy is a vote that is mailed in,like an absentee ballot.

Accepted Answer

A) True 
 B)False

Question 5

Charles owns 1,000 shares of stock in Temperan,Inc.Charles wants to obtain corporate records including the corporation's minute book and accounting records.Under the Model Act,Charles is entitled to this information if he requests it in good faith and

Accepted Answer

A) he has a proper purpose. 
B) he owns at least 1 percent of the company or $2,000 of stock. 
C) he is an employee of Temperan. 
D) he is a controlling shareholder. 
A) he has a proper purpose. 
B) he owns at least 1 percent of the company or $2,000 of stock. 
C) he is an employee of Temperan. 
D) he is a controlling shareholder.

Question 6

Quick Supply House breached a contract with MegaCorp.The breach resulted in the loss of a great deal of money to MegaCorp.The board of directors for MegaCorp vote not to sue the supply house since it believes the legal costs would be more than it would probably recover.If a group of shareholders wish to sue the supply house,this would

Accepted Answer

A) be a type of direct lawsuit. 
B) have to be a derivative lawsuit. 
C) be a settlement lawsuit. 
D) be an SEC lawsuit. 
A) be a type of direct lawsuit. 
B) have to be a derivative lawsuit. 
C) be a settlement lawsuit. 
D) be an SEC lawsuit.

Question 7

What is an inside director?

Accepted Answer

A) A shareholder charged with the illegal act of insider trading 
B) A member of the board of directors who is also a board member of a competing firm 
C) A shareholder who is a board member of a competing firm 
D) A member of the board of directors who is also an employee of the corporation 
A) A shareholder charged with the illegal act of insider trading 
B) A member of the board of directors who is also a board member of a competing firm 
C) A shareholder who is a board member of a competing firm 
D) A member of the board of directors who is also an employee of the corporation

Question 8

Kian is the chief financial officer of Yonkka,Inc.He is also a member of Yonkka's board of directors.Kian is

Accepted Answer

A) an inside director. 
B) an outside director. 
C) holding an illegal position. 
D) a public director. 
A) an inside director. 
B) an outside director. 
C) holding an illegal position. 
D) a public director.

Question 9

A "fundamental change" in a corporation would be illustrated by

Accepted Answer

A) E-prise, Inc.merging with Vitta Corporation. 
B) E-prise electing new members to the board. 
C) Vitta Corporation adding a new product to its product line. 
D) Vitta Corporation setting the date for its annual meeting. 
A) E-prise, Inc.merging with Vitta Corporation. 
B) E-prise electing new members to the board. 
C) Vitta Corporation adding a new product to its product line. 
D) Vitta Corporation setting the date for its annual meeting.

Question 10

In a derivative lawsuit,the named plaintiff

Accepted Answer

A) is the corporation on whose behalf the lawsuit is filed. 
B) is the particular class of shareholders primarily injured by the wrong. 
C) consists of all the corporation's shareholders. 
D) is the board of directors for the corporation. 
A) is the corporation on whose behalf the lawsuit is filed. 
B) is the particular class of shareholders primarily injured by the wrong. 
C) consists of all the corporation's shareholders. 
D) is the board of directors for the corporation.

Question 11

Under SEC rules,companies

Accepted Answer

A) can require electronic delivery of proxy statements to save mailing costs and improve operating efficiency of the corporation. 
B) are required to post the information in the annual report and the proxy statement on their Web site, file it with the SEC, and distribute it to shareholders 
C) must solicit proxies because a shareholder meeting is invalid unless a certain percentage of shareholders attend in person or by proxy. 
D) must give each shareholder a proxy, but not a proxy statement or an annual report, if the company is a public company. 
A) can require electronic delivery of proxy statements to save mailing costs and improve operating efficiency of the corporation. 
B) are required to post the information in the annual report and the proxy statement on their Web site, file it with the SEC, and distribute it to shareholders 
C) must solicit proxies because a shareholder meeting is invalid unless a certain percentage of shareholders attend in person or by proxy. 
D) must give each shareholder a proxy, but not a proxy statement or an annual report, if the company is a public company.

Question 12

Overall,directors get paid very little for the amount of work they perform.

Accepted Answer

A) True 
 B)False

Question 13

Loraine is a shareholder of Taley Corp.She would like to inspect and copy the company's minute book,accounting records,and shareholder lists.Under what circumstances is Loraine allowed to inspect or copy corporate records?

Accepted Answer

A company's obligation to provide shareh

Question 14

Vernon and David are the controlling shareholders in E-treme,Inc.Discuss the obligations that Vernon and David owe to the minority shareholders.

Accepted Answer

The controlling shareholders: may not en

Question 15

In reality,the officers of the large corporations have a great deal of influence on who will be nominated and elected as directors.

Accepted Answer

A) True 
 B)False

Question 16

In a derivative lawsuit,any proceeds awarded by the court must be paid to the corporation,not the shareholders themselves.

Accepted Answer

A) True 
 B)False

Question 17

The NYSE and NASDAQ bothrequire that the members of the nominating committee be independent directorswho are less likely to simply go along with whatever the CEO wants.

Accepted Answer

A) True 
 B)False

Question 18

A corporation is required to have at least one class of stock with voting rights.

Accepted Answer

A) True 
 B)False

Question 19

Explain the ways in which the federal government has tried to change the landscape of corporate governance and executive compensation.

Accepted Answer

The federal government has tried to chan

Question 20

A corporation's obligation to voluntarily provide shareholders with financial information

Accepted Answer

A) depends on whether the company is publicly or privately held. 
B) depends on the requirements of the Model Business Corporation Act. 
C) is extensive and is carefully regulated by the SEC if the company is privately held. 
D) depends on the ruling of the board of directors. 
A) depends on whether the company is publicly or privately held. 
B) depends on the requirements of the Model Business Corporation Act. 
C) is extensive and is carefully regulated by the SEC if the company is privately held. 
D) depends on the ruling of the board of directors.

Exam 35: Shareholder Rights

Matt,a shareholder,can run for director by simply placing his name on the company's proxy statement.

Meredith,a shareholder in Quarto,Inc.,notified Quarto's board of directors that the corporation had been wronged and asked the board to bring a lawsuit in the corporation's name.In response to Meredith's demand,the board

If a public company decides not to solicit proxies for a shareholder meeting,it need not give shareholders the information that would have been required in a proxy statement.

A proxy is a vote that is mailed in,like an absentee ballot.

Charles owns 1,000 shares of stock in Temperan,Inc.Charles wants to obtain corporate records including the corporation's minute book and accounting records.Under the Model Act,Charles is entitled to this information if he requests it in good faith and

What is an inside director?

Kian is the chief financial officer of Yonkka,Inc.He is also a member of Yonkka's board of directors.Kian is

A "fundamental change" in a corporation would be illustrated by

In a derivative lawsuit,the named plaintiff

Under SEC rules,companies

Overall,directors get paid very little for the amount of work they perform.

Loraine is a shareholder of Taley Corp.She would like to inspect and copy the company's minute book,accounting records,and shareholder lists.Under what circumstances is Loraine allowed to inspect or copy corporate records?

Vernon and David are the controlling shareholders in E-treme,Inc.Discuss the obligations that Vernon and David owe to the minority shareholders.

In reality,the officers of the large corporations have a great deal of influence on who will be nominated and elected as directors.

In a derivative lawsuit,any proceeds awarded by the court must be paid to the corporation,not the shareholders themselves.

The NYSE and NASDAQ bothrequire that the members of the nominating committee be independent directorswho are less likely to simply go along with whatever the CEO wants.

A corporation is required to have at least one class of stock with voting rights.

Explain the ways in which the federal government has tried to change the landscape of corporate governance and executive compensation.

A corporation's obligation to voluntarily provide shareholders with financial information

Introduction to Law

Business Ethics and Corporate Social Responsibility

International Law

Common Law, Statutory Law, and Administrative Law

Constitutional Law

Dispute Resolution

Crime

Intentional Torts and Business Torts

Negligence, Strict Liability, and Product Liability

Cyberlaw and Privacy

Introduction to Contracts

Agreement

Consideration

Legality

Capacity and Consent

Written Contracts

Third Parties

Performance, Breach and Discharge

Remedies

Practical Contracts

Introduction to Sales

Ownership, Risk and Warranties

Performance and Remedies

Secured Transactions

Creating a Negotiable Instrument

Liability for Negotiable Instruments

Accountants' Liability

Agency Law

Employment and Labor Law

Employment Discrimination

Starting a Business: LLCs and Other Options

Partnerships

Life and Death of a Corporation

Management Duties

Bankruptcy

Securities Regulation

Antitrust

Consumer Protection

Environmental Law

Intellectual Property

Real Property and Landlord Tenant

Personal Property and Bailment

Planning for the Future: Estates and Insurance

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