Max buys shares of newly issued Zamex Corporation stock for $10 per share and pays $1,000 cash,a car worth $2,000,and a promissory note for $5,000.Under traditional corporate law,followed in about half of the states,how many shares of stock could Max validly buy?

Question

Quizplus · Accepted Answer

Under traditional corporate law, which is followed in about half of the states, all forms of consideration, including cash, tangible property (like a car), and promissory notes, are valid for the purchase of shares. Therefore, Max could validly buy shares worth the total value of the consideration he provides, which is $1,000 (cash) + $2,000 (car) + $5,000 (promissory note) = $8,000. Since the shares are priced at $10 each, Max could buy 800 shares. However, the correct choice as per the options provided is a mistake in the question setup, as none of the options correctly reflects the calculation based on the given information. The correct calculation leads to 800 shares, but this option is not provided correctly in the choices.

Max Buys Shares of Newly Issued Zamex Corporation Stock for $10