Quiz

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Instructions| This quiz consist of 20 multiple choice questions. The first 10 questions cover the material in Chapter 14. The second 10 questions cover the material in Chapter 15. Be sure you are in the correct Chapter when you take the quiz.|

* Question 1
5 out of 5 points
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| In assessing a takeover bid, the directors are not expected to consider theAnswer| | | | | Selected Answer:| prospect of their future employment.| Correct Answer:| prospect of their future employment.|

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* Question 2
5 out of 5 points
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| Brice is on the board of Success Corporation. Eager Corporation has made a move to acquire Success. Tina, the president of Success advises the board that the offer made by Eager is a good one that should be accepted. She did not disclose, however, that Eager had offered her a generous bonus if she could convince the board members of Success to take Eager’s offer. Brice tells the other board members that they should simply rely on Tina because she is probably right, and under the business judgment rule they are protected even if she is wrong. Which of the following is true regarding Brice’s advice?Answer| | | | | Selected Answer:| Brice is incorrect because no statement made by an officer is entitled to blind reliance.| Correct Answer:| Brice is incorrect because no statement made by an officer is entitled to blind reliance.|

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* Question 3
5 out of 5 points
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| The courts have held that officers and directors that usurp a corporate opportunity must disgorge the illegal profits to theAnswer| | | | | Selected Answer:| corporation.|
Correct Answer:| corporation.|
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* Question 4
5 out of 5 points
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| Which of the following is true regarding state rules of corporate governance?Answer| | | | | Selected Answer:| California imposes state pro-shareholder rules on quasi-foreign corporations.| Correct Answer:| California imposes state pro-shareholder rules on quasi-foreign corporations.|

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* Question 5
5 out of 5 points
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| The business judgment rule will not protect a director whoAnswer| | | | | Selected Answer:| has a conflict between personal interests and the interests of the corporation and its shareholders.|

Correct Answer:| has a conflict between personal interests and the interests of the corporation and its shareholders.|
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* Question 6
5 out of 5 points
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| Which state has the nation’s toughest state antitakeover statute?Answer| | | | | Selected Answer:| Pennsylvania|
Correct Answer:| Pennsylvania|
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* Question 7
5 out of 5 points
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| Directors are always ________ of the corporation.Answer| | | | | Selected Answer:| agents|
Correct Answer:| agents|
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* Question 8
5 out of 5 points
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| Some jurisdictions permit the shareholders to amend the articles of incorporation to relieve directors of any financial liability for violations of the duty ofAnswer| | | | | Selected Answer:| care.|

Correct Answer:| care.|
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* Question 9
5 out of 5 points
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| A ________ occurs when minority shareholders are forced to convert their shares into cash, for example, when a subsidiary merges with its parent.Answer| | | | | Selected Answer:| freeze out|

Correct Answer:| freeze out|
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* Question 10
5 out of 5 points
| |
| The ________ requires that officers and directors not take personal advantage of a desirable business investment that rightfully belongs to the corporation.Answer| | | | | Selected Answer:| corporate opportunity doctrine|

Correct Answer:| corporate opportunity doctrine|
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* Question 11
5 out of 5 points
| |
| The U.S. Supreme Court has made it clear that only persons who actually ________ can sue under Rule 10b-5.Answer| | |...
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