Question 1

The date when the principal of a bond is returned to the investor is called the maturity date.

Accepted Answer

This statement is true. The maturity date is the date on which the face value (principal) of a bond is returned to the investor.

Question 2

Inez and Jason are the shareholders and directors of Kleen Kustodial Corporation.Lily and Moe are Kleen's officers.As in other corporations,the responsibility for the overall management of Kleen rests with

Accepted Answer

The board of directors is responsible for the overall management of the corporation, including setting policy and making major decisions. While the officers and shareholders have important roles, ultimately the board has the most authority and responsibility.

Question 3

A sale of all of a corporation's assets requires the approval of its shareholders.

Accepted Answer

The sale of all assets would constitute a fundamental change in the nature of the corporation's business and would, therefore, require approval by the shareholders.

Question 4

Skyla and Terry want to form and do business as Unique Boutique Corporation.Its existence depends generally on

Accepted Answer

The existence of a corporation is governed by state law, including the formation requirements, the rights and responsibilities of shareholders and directors, and the legal procedures for conducting business. Federal law may also apply to certain aspects of corporate operation, such as tax requirements and securities regulations, but the foundation of a corporation's existence is determined by the state in which it is incorporated.

Question 5

Appraisal rights are often extended to regular mergers and consolidations.

Accepted Answer

Appraisal rights are typically provided to shareholders in the case of regular mergers and consolidations. These rights allow shareholders to dissent from the merger or consolidation and receive payment for the fair value of their shares.

Question 6

Because of the ultra vires doctrine,shareholders are told the internal rules of corporate management.

Accepted Answer

The answer of Because of the ultra vires doctrine,shareholders are...

Question 7

In a consolidation,the consolidating corporations become subsidiaries of the new corporation.

Accepted Answer

The answer of In a consolidation,the consolidating corporations become subsidiaries...

Question 8

An appraisal right is available only when a state statute specifically provides for it.

Accepted Answer

This statement is true. Appraisal rights are a statutory right that vary by state law, so they are only available when a state statute specifically provides for them.

Question 9

Only a board of directors can initiate the dissolution of a corporation.

Accepted Answer

The answer of Only a board of directors can initiate...

Question 10

In a short-form merger,neither corporation's shareholders need to approve the merger.

Accepted Answer

In a short-form merger, the approval of the acquiring corporation's board of directors is sufficient to complete the merger, and the shareholders of the target corporation do not need to approve the transaction.

Question 11

When a sale of assets amounts to what in fact is a consolidation,the ac?quiring corporation inherits the selling corporation's liabilities.

Accepted Answer

In a consolidation, the acquiring corporation takes over the selling corporation's assets and liabilities, so it is true that the acquiring corporation inherits the selling corporation's liabilities.

Question 12

A corporation has an implied power to extend credit to those with whom it has a legal or contractual relationship.

Accepted Answer

This is known as the implied power of a corporation and allows it to extend credit to those with whom it has a legal or contractual relationship, even if it is not specifically stated in the company's governing documents.

Question 13

Erin is a shareholder in African Adventures.As a shareholder,Erin

Accepted Answer

As a shareholder, Erin owns shares of stock in African Adventures. Shareholders are owners of a company and have the right to receive dividends, attend shareholder meetings, and vote on important company decisions. They also have limited liability, meaning they are not personally responsible for the company's debts. However, their liability is limited to the amount of money they invested in the company. Therefore, option A is the correct choice.

Question 14

Any person who buys preferred stock has priority over a holder of common stock to payment on the corporation's dissolution.

Accepted Answer

This is true. Preferred stockholders have priority over common stockholders in the event of the corporation's dissolution, meaning they will be paid out first before common stockholders receive any payment.

Question 15

A court cannot dissolve a corporation for mismanagement.

Accepted Answer

The answer of A court cannot dissolve a corporation for...

Question 16

Pola and Quincy want to form and do business as River Tours Corporation.A corporation is owned by

Accepted Answer

Shareholders are the owners of a corporation and have a stake in the company through ownership of shares. The board of directors and officers are appointed or elected by the shareholders to manage the company, and employees do not have ownership in the corporation.

Question 17

Legally,a merger and a consolidation are the same thing.

Accepted Answer

A merger and consolidation are not the same thing legally. In a merger, two companies come together to form a new entity, while in a consolidation, two companies merge into one of the existing companies.

Question 18

Express powers of a corporation can be found in federal constitutions.

Accepted Answer

Express powers of a corporation are granted by federal constitutions such as the United States Constitution. These powers are specifically listed and defined in the constitution, giving the corporation the authority to exercise those powers.

Question 19

In most cases,only a corporation's common stockholders need to approve a merger.

Accepted Answer

The answer of In most cases,only a corporation's common stockholders...

Question 20

George is the founder of Excellent Exotics Corporation.Wilson is a shareholder and director and Bill is an officer.The day-to-day operations of Excellent Exotics are overseen by

Accepted Answer

Officers such as Bill are responsible for the day-to-day operations of the corporation. Shareholders and directors such as Wilson typically have a more supervisory role, while founders like George may have a more strategic role in the company's direction.

Quiz 30: Formation and Termination of a Corporation