Question 1

Common stockholders do not possess the right to a share of the assets of a corporation on dissolution.

Accepted Answer

A) True 
 B)False  False

Question 2

What is the purpose of blue-sky laws? Explain. ​

Accepted Answer

The purpose of blue-sky laws is to prevent fraud through the sale of worthless stocks and bonds. State blue-sky laws apply only to intrastate transactions. These security laws vary from state to state. Some prescribe criminal penalties for engaging in prohibited transactions. Others require that dealers be licensed and that a state commission approve sales of securities before a corporation offers them to the public. ​

Question 3

Which of the following is true about par-value stock?

Accepted Answer

A) The par value of the stock must equal the value of money, property, or services received by the corporation. 
B) The par value of the stock must equal the value of money, property, or services received by the stockholder who sells it. 
C) Common stock usually has a par value. 
D) When sold by a corporation at a discount the corporation is liable to make up the discount. 
A) The par value of the stock must equal the value of money, property, or services received by the corporation. 
B) The par value of the stock must equal the value of money, property, or services received by the stockholder who sells it. 
C) Common stock usually has a par value. 
D) When sold by a corporation at a discount the corporation is liable to make up the discount. A

Question 4

A publicly traded corporation is required to follow the regulations as set forth in the Securities Exchange Act of 1934.

Accepted Answer

A) True 
 B)False

Question 5

The of a corporation is the declared money value of its outstanding stock. ​

Accepted Answer

A) preferred stock 
B) inventory stock 
C) treasury stock 
D) capital stock 
A) preferred stock 
B) inventory stock 
C) treasury stock 
D) capital stock

Question 6

Which of the following is required by the Securities Investor Protection Act of 1970?

Accepted Answer

A) Registered dealers must contribute to a fund to compensate customers of failed investment houses. 
B) Corporations must make periodic disclosure statements regarding their financial structure. 
C) Insiders must make certain disclosures. 
D) Anyone offering a new issue of securities for sale to the public must register it with the SEC. 
A) Registered dealers must contribute to a fund to compensate customers of failed investment houses. 
B) Corporations must make periodic disclosure statements regarding their financial structure. 
C) Insiders must make certain disclosures. 
D) Anyone offering a new issue of securities for sale to the public must register it with the SEC.

Question 7

Which of the following best describes a share?

Accepted Answer

A) It is the unit value of a company's total stock. 
B) It the unit value of a company's liabilities. 
C) It is the total value of a company's assets. 
D) It is total value of a company's liabilities. 
A) It is the unit value of a company's total stock. 
B) It the unit value of a company's liabilities. 
C) It is the total value of a company's assets. 
D) It is total value of a company's liabilities.

Question 8

The fact a person is named on a stock certificate is prima facie evidence that person is the owner.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is true of dividends paid to shareholders?

Accepted Answer

A) Dividends can be paid in the form of property manufactured by another organization. 
B) Cash dividends can be declared and then rescinded by the directors. 
C) Dividends can be paid with stock a corporation owns in another company. 
D) Stock dividends cannot be rescinded once declared. 
A) Dividends can be paid in the form of property manufactured by another organization. 
B) Cash dividends can be declared and then rescinded by the directors. 
C) Dividends can be paid with stock a corporation owns in another company. 
D) Stock dividends cannot be rescinded once declared.

Question 10

Preferred stockholders may receive a preference as to dividends, assets or both.

Accepted Answer

A) True 
 B)False

Question 11

A person may obtain shares of stock by subscription only after a corporation is organized. ​

Accepted Answer

A) True 
 B)False

Question 12

Which of the following best describes a prospectus?

Accepted Answer

A) It is a document relating to purchase and subsequent resale of company assets and intellectual property. 
B) It is a document containing specified information about a stock offering and the corporation. 
C) It is a document pertaining to the conduct regulations of the company. 
D) It is a document containing information relating to the bylaws of the company. 
A) It is a document relating to purchase and subsequent resale of company assets and intellectual property. 
B) It is a document containing specified information about a stock offering and the corporation. 
C) It is a document pertaining to the conduct regulations of the company. 
D) It is a document containing information relating to the bylaws of the company.

Question 13

A cash dividend may be paid out of paid-in surplus.

Accepted Answer

A) True 
 B)False

Question 14

Stock preferred as to assets gives the holder an advantage only in the event of liquidation.

Accepted Answer

A) True 
 B)False

Question 15

The federal Securities Act regulates the sale of securities in interstate commerce.

Accepted Answer

A) True 
 B)False

Question 16

Cumulative preferred stock is preferred stock on which dividends have to be paid only for the current year before common stock dividends are paid.

Accepted Answer

A) True 
 B)False

Question 17

is preferred stock on which all dividends must be paid before the common stock receives any dividend.

Accepted Answer

A) Par value preferred stock 
B) Participating preferred stock 
C) Noncumulative preferred stock 
D) Cumulative preferred stock 
A) Par value preferred stock 
B) Participating preferred stock 
C) Noncumulative preferred stock 
D) Cumulative preferred stock

Question 18

Which of the following is true of restrictions on the sale of a private corporation's stock?

Accepted Answer

A) Such restrictions are not common. 
B) Restrictions on the sale of stock are not binding on stockholders. 
C) They frequently require a stockholder to offer to sell the stock to the corporation or other shareholders. 
D) They mean the holder has no right to any distribution that represents a share of the profits. 
A) Such restrictions are not common. 
B) Restrictions on the sale of stock are not binding on stockholders. 
C) They frequently require a stockholder to offer to sell the stock to the corporation or other shareholders. 
D) They mean the holder has no right to any distribution that represents a share of the profits.

Question 19

A stock option may be exercised at any point during the stated period of time in the contract.

Accepted Answer

A) True 
 B)False

Question 20

Once the directors of a corporation declare a cash dividend, it cannot later be rescinded.

Accepted Answer

A) True 
 B)False

Exam 33: Ownership of a Corporation

Common stockholders do not possess the right to a share of the assets of a corporation on dissolution.

What is the purpose of blue-sky laws? Explain. ​

Which of the following is true about par-value stock?

A publicly traded corporation is required to follow the regulations as set forth in the Securities Exchange Act of 1934.

The of a corporation is the declared money value of its outstanding stock. ​

Which of the following is required by the Securities Investor Protection Act of 1970?

Which of the following best describes a share?

The fact a person is named on a stock certificate is prima facie evidence that person is the owner.

Which of the following is true of dividends paid to shareholders?

Preferred stockholders may receive a preference as to dividends, assets or both.

A person may obtain shares of stock by subscription only after a corporation is organized. ​

Which of the following best describes a prospectus?

A cash dividend may be paid out of paid-in surplus.

Stock preferred as to assets gives the holder an advantage only in the event of liquidation.

The federal Securities Act regulates the sale of securities in interstate commerce.

Cumulative preferred stock is preferred stock on which dividends have to be paid only for the current year before common stock dividends are paid.

is preferred stock on which all dividends must be paid before the common stock receives any dividend.

Which of the following is true of restrictions on the sale of a private corporation's stock?

A stock option may be exercised at any point during the stated period of time in the contract.

Once the directors of a corporation declare a cash dividend, it cannot later be rescinded.

Introduction to Law

Courts and Court Procedures

Business Torts and Crimes

Government Regulation of Business

Nature and Classes of Contracts

Offer and Acceptance

Capacity to Contract

Consideration

Defective Agreements

Illegal Agreements

Written Contracts

Third Parties and Contracts

Termination of Contracts

Nature of Personal Property

Special Bailments

Sales of Personal Property

Formalities of a Sale

Transfer of Title and Risk in Sales Contracts

Warranties Product Liability and Consumer Protection

Nature of Negotiable Instruments

Essentials of Negotiability

Promissory Notes and Drafts

Negotiation and Discharge

Liabilities of Parties, Holders in Due Course and Defenses

Nature and Creation of an Agency

Operation and Termination of an Agency

Employer and Employee Relations

Employees Rights

Introduction to Business Organizations

Creation and Operation of a Partnership

Dissolution of a Partnership

Nature of a Corporation

Management and Dissolution of a Corporation

Principles of Insurance

Types of Insurance

Security Devices

Bankruptcy

Nature of Real Property

Transfer of Real Property

Real Estate Mortgages

Landlord and Tenant

Wills Inheritances and Trust

Filters

What is the purpose of blue-sky laws? Explain.

The of a corporation is the declared money value of its outstanding stock.

A person may obtain shares of stock by subscription only after a corporation is organized.