Question 1

Faye and Grant are shareholders of Hearthside Hotels, Inc. As shareholders, they must approve​

Accepted Answer

A)   ​a merger.
B)   ​a decision to pursue new business opportunities.
C)   ​none of the choices.
D)   ​a contract between management and labor.E) All of the above
F) A) and B)

Question 2

Dane is a director of Eco Packing Company. Dane's rights, as a director, do not include a right to​

Accepted Answer

A)   ​reimbursement.
B)   ​inspection.
C)   ​participation.
D)   ​self-dealing.E) A) and C)
F) A) and B)

Question 3

A corporation cannot be formed for purposes other than making a profit.​

Accepted Answer

A) True 
 B)False

Question 4

Charlie, Dora, and Ethel are the first directors on the board of Face Time Corporation, a social media host. Subsequent directors are elected by a majority vote of Face Time's​

Accepted Answer

A)   ​users.
B)   ​employees.
C)   ​officers.
D)   ​shareholders.E) C) and D)
F) A) and C)

Question 5

Each director present at a board meeting has one vote.​

Accepted Answer

A) True 
 B)False

Question 6

Ernie is a director of Five-Star Properties, Inc. Ernie is a property appraiser. Five-Star makes several purchases in which it pays too much. Ernie approves all the transactions without evaluating them. He is most likely liable for breach of​

Accepted Answer

A)   the duty of care.​
B)   ​none of the choices.
C)   ​the duty of loyalty.
D)   ​the business judgment rule.E) B) and C)
F) None of the above

Question 7

In corporate law, acts of a corporation that are beyond its express or implied powers are de facto acts.​

Accepted Answer

A) True 
 B)False

Question 8

Wings2Go Corporation fails to hold an organizational meeting. In this circumstance, Wings2Go is most likely​

Accepted Answer

A)   ​a corporation by estoppel.
B)   ​a de facto corporation.
C)   ​a de jure corporation.
D)   ​ultra vires.E) C) and D)
F) B) and D)

Question 9

In some situations, a majority shareholder owes a fiduciary duty to minority shareholders.​

Accepted Answer

A) True 
 B)False

Question 10

Every shareholder is entitled to examine specified corporate records, but only in person, not through an agent.​

Accepted Answer

A) True 
 B)False

Question 11

Doris wants to form a new firm-eBeats-to market a new app. Fees are required to form all of the following business organizations except​

Accepted Answer

A)   ​a sole proprietorship.
B)   ​a corporation.
C)   ​a limited partnership.
D)   ​a limited liability company.E) C) and D)
F) B) and C)

Question 12

Flo and Glen form Health Food Inc. to coordinate the purchase, sale, and delivery of food products from organic farms to hospitals and other institutions. The stated purpose is to make a profit and to have a material positive impact on society and the environment. Health Food is​

Accepted Answer

A)   ​a nonprofit corporation.
B)   ​not a corporation.
C)   ​a benefit corporation.
D)   ​a private corporation.E) C) and D)
F) A) and C)

Question 13

Corporate directors and officers are insurers of business success.​

Accepted Answer

A) True 
 B)False

Question 14

Nina is a director of Outback Outfitters, Inc. Under the standard of due care owed by directors of a corporation, Nina's decisions must be informed and​

Accepted Answer

A)   ​reasonable.
B)   ​unquestionable.
C)   ​indefensible.
D)   ​perfect.E) A) and C)
F) All of the above

Question 15

Not all directors have a right to access a corporation's books and records, facilities, and premises.​

Accepted Answer

A) True 
 B)False

Question 16

Blair and Chanel are holders of common stock in Discount Retail Stores, Inc. Like other holders of common stock, they have a residual position in the overall financial structure of Discount Retail, because they​

Accepted Answer

A)   ​are guaranteed to receive more than the amount of their investment.
B)   ​are the last to receive returns for their investment.
C)   ​have priority to the firm's assets if it becomes insolvent.
D)   ​reside in the state of the firm's incorporation.E) None of the above
F) A) and B)

Question 17

Roy, a director of Service & Sales Corporation, does not attend a board meeting for three years. During that time, Terry, the firm's president, makes improper loans that cost the company $10 million. Roy is most likely liable for breach of​

Accepted Answer

A)   ​the business judgment rule.
B)   ​the duty of care.
C)   ​the duty of loyalty.
D)   ​none of the choices.E) A) and D)
F) C) and D)

Question 18

A de jure corporation is one that is formed for a single purpose.​

Accepted Answer

A) True 
 B)False

Question 19

Stocks represent the borrowing of funds by firms.​

Accepted Answer

A) True 
 B)False

Question 20

Mike is a shareholder of NatGas, Inc. NatGas uses cumulative voting to elect directors. This means that the number of Mike's votes is determined by the number of​

Accepted Answer

A)   ​years that he has been a shareholder.
B)   ​members of the board to be elected multiplied by the total number of voting shares that he holds.
C)   ​shareholders present at the shareholders' meeting.
D)   ​shareholders' meetings that he has attended.E) A) and B)
F) A) and C)

Exam 19: Corporations

Nina is a director of Outback Outfitters, Inc. Under the standard of due care owed by directors of a corporation, Nina's decisions must be informed and​

Correct AnswerverifiedShow Answer

Flo and Glen form Health Food Inc. to coordinate the purchase, sale, and delivery of food products from organic farms to hospitals and other institutions. The stated purpose is to make a profit and to have a material positive impact on society and the environment. Health Food is​

Correct AnswerverifiedShow Answer

Doris wants to form a new firm-eBeats-to market a new app. Fees are required to form all of the following business organizations except​

Correct AnswerverifiedShow Answer

Every shareholder is entitled to examine specified corporate records, but only in person, not through an agent.​

Correct AnswerverifiedShow Answer

Blair and Chanel are holders of common stock in Discount Retail Stores, Inc. Like other holders of common stock, they have a residual position in the overall financial structure of Discount Retail, because they​

Correct AnswerverifiedShow Answer

A corporation cannot be formed for purposes other than making a profit.​

Correct AnswerverifiedShow Answer

Wings2Go Corporation fails to hold an organizational meeting. In this circumstance, Wings2Go is most likely​

Correct AnswerverifiedShow Answer

Roy, a director of Service & Sales Corporation, does not attend a board meeting for three years. During that time, Terry, the firm's president, makes improper loans that cost the company $10 million. Roy is most likely liable for breach of​

Correct AnswerverifiedShow Answer

Not all directors have a right to access a corporation's books and records, facilities, and premises.​

Correct AnswerverifiedShow Answer

Dane is a director of Eco Packing Company. Dane's rights, as a director, do not include a right to​

Correct AnswerverifiedShow Answer

In corporate law, acts of a corporation that are beyond its express or implied powers are de facto acts.​

Correct AnswerverifiedShow Answer

In some situations, a majority shareholder owes a fiduciary duty to minority shareholders.​

Correct AnswerverifiedShow Answer

Charlie, Dora, and Ethel are the first directors on the board of Face Time Corporation, a social media host. Subsequent directors are elected by a majority vote of Face Time's​

Correct AnswerverifiedShow Answer

Mike is a shareholder of NatGas, Inc. NatGas uses cumulative voting to elect directors. This means that the number of Mike's votes is determined by the number of​

Correct AnswerverifiedShow Answer

A de jure corporation is one that is formed for a single purpose.​

Correct AnswerverifiedShow Answer

Ernie is a director of Five-Star Properties, Inc. Ernie is a property appraiser. Five-Star makes several purchases in which it pays too much. Ernie approves all the transactions without evaluating them. He is most likely liable for breach of​

Correct AnswerverifiedShow Answer

Each director present at a board meeting has one vote.​

Correct AnswerverifiedShow Answer

Corporate directors and officers are insurers of business success.​

Correct AnswerverifiedShow Answer

Faye and Grant are shareholders of Hearthside Hotels, Inc. As shareholders, they must approve​

Correct AnswerverifiedShow Answer

Stocks represent the borrowing of funds by firms.​

Correct AnswerverifiedShow Answer

Nina is a director of Outback Outfitters, Inc. Under the standard of due care owed by directors of a corporation, Nina's decisions must be informed and

Correct Answer
verified

Flo and Glen form Health Food Inc. to coordinate the purchase, sale, and delivery of food products from organic farms to hospitals and other institutions. The stated purpose is to make a profit and to have a material positive impact on society and the environment. Health Food is

Correct Answer
verified

Doris wants to form a new firm-eBeats-to market a new app. Fees are required to form all of the following business organizations except

Correct Answer
verified

Every shareholder is entitled to examine specified corporate records, but only in person, not through an agent.

Correct Answer
verified

Blair and Chanel are holders of common stock in Discount Retail Stores, Inc. Like other holders of common stock, they have a residual position in the overall financial structure of Discount Retail, because they

Correct Answer
verified

A corporation cannot be formed for purposes other than making a profit.

Correct Answer
verified

Wings2Go Corporation fails to hold an organizational meeting. In this circumstance, Wings2Go is most likely

Correct Answer
verified

Roy, a director of Service & Sales Corporation, does not attend a board meeting for three years. During that time, Terry, the firm's president, makes improper loans that cost the company $10 million. Roy is most likely liable for breach of

Correct Answer
verified

Not all directors have a right to access a corporation's books and records, facilities, and premises.

Correct Answer
verified

Dane is a director of Eco Packing Company. Dane's rights, as a director, do not include a right to

Correct Answer
verified

In corporate law, acts of a corporation that are beyond its express or implied powers are de facto acts.

Correct Answer
verified

In some situations, a majority shareholder owes a fiduciary duty to minority shareholders.

Correct Answer
verified

Charlie, Dora, and Ethel are the first directors on the board of Face Time Corporation, a social media host. Subsequent directors are elected by a majority vote of Face Time's

Correct Answer
verified

Mike is a shareholder of NatGas, Inc. NatGas uses cumulative voting to elect directors. This means that the number of Mike's votes is determined by the number of

Correct Answer
verified

A de jure corporation is one that is formed for a single purpose.

Correct Answer
verified

Ernie is a director of Five-Star Properties, Inc. Ernie is a property appraiser. Five-Star makes several purchases in which it pays too much. Ernie approves all the transactions without evaluating them. He is most likely liable for breach of

Correct Answer
verified

Each director present at a board meeting has one vote.

Correct Answer
verified

Corporate directors and officers are insurers of business success.

Correct Answer
verified

Faye and Grant are shareholders of Hearthside Hotels, Inc. As shareholders, they must approve

Correct Answer
verified

Stocks represent the borrowing of funds by firms.

Correct Answer
verified