Question 1

Secured bondholders can foreclose on the collateral in the event of nonpayment of interest or principal.

Accepted Answer

A) True 
 B)False

Question 2

Explain the CEO and CFO certification provision of the Sarbanes-Oxley Act (SOX)of 2002.

Accepted Answer

The CEO and chief financial officer (CFO

Question 3

A corporation that is incorporated in another country is known as a(n)________ corporation.

Accepted Answer

The answer of A corporation that is incorporated in another...

Question 4

A director or corporate officer who usurps a corporate opportunity would be violating the director's fiduciary duty called the ________.

Accepted Answer

The answer of A director or corporate officer who usurps...

Question 5

Which of the following shares have the right to vote?

Accepted Answer

A) unissued shares 
B) treasury shares 
C) outstanding shares 
D) liquidated shares 
A) unissued shares 
B) treasury shares 
C) outstanding shares 
D) liquidated shares

Question 6

Treasury shares cannot be reissued by a corporation.

Accepted Answer

A) True 
 B)False

Question 7

Marshall is a purchasing agent for DigitoolArt Corporation.His duties require him to negotiate and execute contracts to purchase office supplies and equipment for the corporation.Assume that Bronson,a computer sales representative,pays Marshall a $20,000 kickback to purchase from him computers needed by DigitoolArt Corporation.What breach of the duty of loyalty has Marshall committed here?

Accepted Answer

A) competing with the corporation 
B) making a secret profit 
C) self-dealing 
D) usurping a corporate opportunity 
A) competing with the corporation 
B) making a secret profit 
C) self-dealing 
D) usurping a corporate opportunity

Question 8

Once a quorum is present,the withdrawal of shares does not affect the quorum of the meeting.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

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

Question 10

The annual shareholders' meeting is held to elect new shareholders.

Accepted Answer

A) True 
 B)False

Question 11

The Merrick and Stanley Corporation has 28,000 outstanding shares.During a proposal for a merger,the shareholders decide to increase the quorum of the vote of shareholders to 75 percent,using the supramajority voting rule.How many minimum affirmative votes would be needed to pass the supramajority voting requirement?

Accepted Answer

A) 14,001 
B) 21,280 
C) 21,000 
D) 28,000 
A) 14,001 
B) 21,280 
C) 21,000 
D) 28,000

Question 12

A duty that requires directors and officers to not act adversely to the interests of the corporation and to subordinate their personal interests to those of the corporation and its shareholders is known as ________.

Accepted Answer

A) the duty of care 
B) the duty of loyalty 
C) the duty of obedience 
D) self-dealing 
A) the duty of care 
B) the duty of loyalty 
C) the duty of obedience 
D) self-dealing

Question 13

Which of the following is true of treasury shares?

Accepted Answer

A) They cannot be issued by the corporation. 
B) They cannot be voted by the corporation. 
C) They are owned by shareholders. 
D) They are entitled to receive dividends. 
A) They cannot be issued by the corporation. 
B) They cannot be voted by the corporation. 
C) They are owned by shareholders. 
D) They are entitled to receive dividends.

Question 14

The Inkilwas Corporation has 30,000 shares outstanding.A shareholders' meeting is duly called to amend the company's articles of incorporation,and 17,501 shares are represented at the meeting.If an amendment to the articles of incorporation is put to vote at this meeting,which of the following statements is true in terms of passage of the amendment?

Accepted Answer

A) The amendment will not pass,since all 30,000 outstanding shares must be represented at the meeting in order to vote to amend the articles of incorporation. 
B) The amendment will pass if all 17,501 shares represented at the meeting vote to approve it. 
C) The amendment will pass if 4,376 shares represented at the meeting vote to approve it. 
D) The amendment will pass if 8,751 shares represented at the meeting vote to approve it. 
A) The amendment will not pass,since all 30,000 outstanding shares must be represented at the meeting in order to vote to amend the articles of incorporation. 
B) The amendment will pass if all 17,501 shares represented at the meeting vote to approve it. 
C) The amendment will pass if 4,376 shares represented at the meeting vote to approve it. 
D) The amendment will pass if 8,751 shares represented at the meeting vote to approve it.

Question 15

In which of the following cases can the alter ego doctrine be invoked in a corporate civil case?

Accepted Answer

A) when shareholders bring a lawsuit on behalf of the corporation after the corporation failed to do so itself 
B) when unpaid creditors are trying to collect from shareholders a debt owed by the corporation 
C) when there is mismanagement of corporate stocks by the board of directors 
D) when shareholders are trying to collect for fraud committed by a third party 
A) when shareholders bring a lawsuit on behalf of the corporation after the corporation failed to do so itself 
B) when unpaid creditors are trying to collect from shareholders a debt owed by the corporation 
C) when there is mismanagement of corporate stocks by the board of directors 
D) when shareholders are trying to collect for fraud committed by a third party

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

Authorized shares that have been sold by a corporation are called issued shares.

Accepted Answer

A) True 
 B)False

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 Revised Model Business Corporation Act (RMBCA),what is the minimum number of 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

What is common stock? What are its features?

Accepted Answer

Common stock is an equity security that

Question 20

Which of the following criteria must be satisfied for a corporation to be treated as an S corporation?

Accepted Answer

A) The corporation's shareholders must be other corporations or partnerships. 
B) The corporation's shareholders must be citizens or residents of the United States. 
C) The corporation must have more than 100 shareholders. 
D) The corporation must have more than one class of stock. 
A) The corporation's shareholders must be other corporations or partnerships. 
B) The corporation's shareholders must be citizens or residents of the United States. 
C) The corporation must have more than 100 shareholders. 
D) The corporation must have more than one class of stock.

Exam 16: Corporations and Corporate Governance

Secured bondholders can foreclose on the collateral in the event of nonpayment of interest or principal.

Explain the CEO and CFO certification provision of the Sarbanes-Oxley Act (SOX)of 2002.

A corporation that is incorporated in another country is known as a(n)________ corporation.

A director or corporate officer who usurps a corporate opportunity would be violating the director's fiduciary duty called the ________.

Which of the following shares have the right to vote?

Treasury shares cannot be reissued by a corporation.

Once a quorum is present,the withdrawal of shares does not affect the quorum of the meeting.

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

The annual shareholders' meeting is held to elect new shareholders.

A duty that requires directors and officers to not act adversely to the interests of the corporation and to subordinate their personal interests to those of the corporation and its shareholders is known as ________.

Which of the following is true of treasury shares?

In which of the following cases can the alter ego doctrine be invoked in a corporate civil case?

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

Authorized shares that have been sold by a corporation are called issued shares.

What is common stock? What are its features?

Which of the following criteria must be satisfied for a corporation to be treated as an S corporation?

Legal Heritage and the Digital Age

Ethics and Social Responsibility of Business

Courts, Jurisdiction, and Administrative Agencies

Alternative, Judicial, and E-Dispute Resolution

Constitutional Law for Business and E-Commerce

Torts and Strict Liability

Cyber Law and Cyber Crimes

Intellectual Property and Cyber Piracy

Formation and Requirements of Contracts

Performance and Breach of Contracts

Digital Law and E-Commerce

UCC Sales Contracts, Leases, and Warranties

Credit, Secured Transactions, and Bankruptcy

Small Business, General Partnerships, and Limited Partnerships

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

Investor Protection, E-Securities, and Wall Street Reform

Agency Law

Equal Opportunity in Employment

Employment Law and Worker Protection

Labor Law and Immigration Law

Antitrust Law and Unfair Trade Practices

Consumer Protection

Environmental Protection

Real Property and Land Use Regulation

International and World Trade Law

Accountants' Duties and Liability

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