Question 1

Only outstanding shares have the right to vote.

Accepted Answer

A) True 
 B)False

Question 2

Convertible preferred stock permits the preferred stockholders to convert their shares into common stock.

Accepted Answer

A) True 
 B)False

Question 3

The written document submitted by a person who has been authorized by a shareholder to vote the shareholder's shares at the shareholders' meetings in the event of the shareholder's absence is known as ________.

Accepted Answer

A)  record date 
B)  notice of shareholder's meeting 
C)  certificate of authority 
D)  proxy card

Question 4

According to the RMBCA, what establishes a quorum to hold a meeting of the shareholders?

Accepted Answer

A)  a majority of outstanding shares 
B)  a majority of unissued shares 
C)  a majority of treasury shares 
D)  a majority of liquidated shares

Question 5

In a share exchange, one corporation ends up owning all the shares of the other.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is a definition of a foreign corporation?

Accepted Answer

A)  A corporation with incorporations in multiple states. 
B)  A corporation in the state in which it is incorporated. 
C)  A corporation in states other than the one in which it is incorporated. 
D)  A corporation in the United States which has been incorporated in another country.

Question 7

The election of directors of the corporation can be held by electronic transmission.

Accepted Answer

A) True 
 B)False

Question 8

Shareholders do not have to attend a shareholders' meeting to vote.

Accepted Answer

A) True 
 B)False

Question 9

Helen works as the vice-president of Gotspeed Corporation, a company that develops and sells sports shoes. Nestor, a private cobbler, makes a new model of shoes that help a user's feet grip the shoe better, and he calls it the Anklator. Nestor's friend fixes an appointment for him with Helen to present his shoe model for possible adoption by Gotspeed. Instead of bringing the opportunity to Gotspeed's board of directors and the corporation, Helen pays Nestor's asking price and purchases the Anklator model for herself. Helen leaves Gotspeed Corporation and forms her own company that manufactures and markets the Anklator shoe models. What breach of the duty of loyalty has Helen committed here?

Accepted Answer

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

Question 10

Stock for which any missed dividend payments must be paid in the future to the preferred shareholders before the common shareholders can receive any dividends are known as ________.

Accepted Answer

A)  cumulative preferred stocks 
B)  noncumulative preferred stocks 
C)  common stocks 
D)  participating preferred stock

Question 11

________ is a system in which each shareholder votes the number of shares he or she owns on candidates for each of the positions open.

Accepted Answer

A)  Cumulative voting 
B)  Straight voting 
C)  Supramajority voting 
D)  Trust vote

Question 12

In a voting trust, the legal titles to the shares given to the trustee are held in the name of the shareholders.

Accepted Answer

A) True 
 B)False

Question 13

________ are employees of a corporation who are appointed by the board of directors to manage the day-to-day operations of the corporation.

Accepted Answer

A)  Corporate officers 
B)  Shareholders 
C)  Registered agents 
D)  Ombudsmen

Question 14

A shareholder's authorization of another person to vote the shareholder's shares at the shareholders' meetings in the event of the shareholder's absence is called a(n)________.

Accepted Answer

The answer of A shareholder's authorization of another person to...

Question 15

Bilkis Brans has 20,000 outstanding shares with four shareholders. Ester owns 9,000 shares, Mendez owns 4,000 shares, Judy owns 4,000 shares, and Aaron owns 3000 shares. Suppose that two directors of the corporation are to be elected from a potential pool of 5 candidates. Ester is in favor of Candidates 1 and 5; Mendez in favor of Candidates 2 and 4; Judy in favor of Candidates 4 and 3; and Aaron in favor of Candidates 2 and 3. If the voting was done by straight voting, which of the two candidates are likely to win?

Accepted Answer

A)  Candidate 1 and Candidate 5 
B)  Candidate 1 and Candidate 4 
C)  Candidate 2 and Candidate 3 
D)  Candidate 2 and Candidate 4

Question 16

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 17

Authorized shares that have not been sold by the corporation are known as ________.

Accepted Answer

The answer of Authorized shares that have not been sold...

Question 18

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 paid dividends for.

Question 19

Explain the business judgment rule followed by corporations when it comes to breach of duty by directors and officers.

Accepted Answer

The answer of Explain the business judgment rule followed by...

Question 20

Corporations are not allowed to enter into contracts in their own name.

Accepted Answer

A) True 
 B)False

Exam 16: Corporations and the Sarbanes-Oxley Act

Only outstanding shares have the right to vote.

Convertible preferred stock permits the preferred stockholders to convert their shares into common stock.

The written document submitted by a person who has been authorized by a shareholder to vote the shareholder's shares at the shareholders' meetings in the event of the shareholder's absence is known as ________.

According to the RMBCA, what establishes a quorum to hold a meeting of the shareholders?

In a share exchange, one corporation ends up owning all the shares of the other.

Which of the following is a definition of a foreign corporation?

The election of directors of the corporation can be held by electronic transmission.

Shareholders do not have to attend a shareholders' meeting to vote.

Stock for which any missed dividend payments must be paid in the future to the preferred shareholders before the common shareholders can receive any dividends are known as ________.

________ is a system in which each shareholder votes the number of shares he or she owns on candidates for each of the positions open.

In a voting trust, the legal titles to the shares given to the trustee are held in the name of the shareholders.

________ are employees of a corporation who are appointed by the board of directors to manage the day-to-day operations of the corporation.

A shareholder's authorization of another person to vote the shareholder's shares at the shareholders' meetings in the event of the shareholder's absence is called a(n)________.

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

Authorized shares that have not been sold by the corporation are known as ________.

Which of the following is true of treasury shares?

Explain the business judgment rule followed by corporations when it comes to breach of duty by directors and officers.

Corporations are not allowed to enter into contracts in their own name.