Exam 34: Financial Structure of Corporations

As amended in 2002, the Revised Act permits the creation of classes or series of shares with terms that vary among holders of the same class or series so long as the variations are expressly set forth in the articles of incorporation.

Bonds subject to a redemption provision, which permits the corporation to redeem, or pay off, all or a part of the issue before maturity at a specified redemption price are known as:

The board of directors may issue bonds without the authorization or consent of the shareholders.

Once properly declared, the effect of a distribution is:

In which of the following ways do debt and equity securities necessarily differ?

The first federal statute for the regulation of securities offered for sale and sold through interstate commerce was passed in:

A shareholder of one-third of all the stock in a corporation would be entitled to one-third of all corporate assets of an ongoing company.

The MBCA as amended in 1980 and the Revised Act have adopted a net asset test for the issuance of dividends.

Which of the following is correct with regard to "par value"?

A bondholder generally takes less of a financial risk than a shareholder of a corporation.

Discuss the use of and types of stock options.

Under the Revised Act, Hartzell, a director who is a member of the board that declares an illegal dividend, may be but is not under all circumstances personally liable to the company for the amount that is illegal even if she personally voted for the distribution contrary to the company's charter.

Shares without par value may be issued for any amount set by the board or the shareholders.

Gribold, Inc.authorized and specified in its charter 8,000 shares of stock to be issued.If it later needs to issue stock in excess of 8,000 shares, the charter will have to be amended.

Yields on "junk bonds" are higher than the rate of safe government bonds.

Even if it has been lawfully and properly declared, a stock dividend may be revoked unless it has been actually distributed.

If Class A preferred shares provide only for a cumulative dividend of $3 per share, what will be the consequence on liquidation?

What are the principal sources for corporate financing?

State laws that regulate the issuance and sale of securities are known as:

Allen owns 500 of the 5000 shares outstanding of General Myopics.GM plans to issue 600 new shares.If Allen has preemptive rights, he may: