Question 1

Which of the following is true regarding liability of Frances,if any,for purchasing the stock at below its fair market value?

Accepted Answer

A)   If the board wanted to offer it to her, they had that right, and there is no consequence to Frances.
B)   She is liable for double the stated corporate value of the stock in addition to any price she already paid.
C)   She is liable for the stated corporate value of the stock in addition to any price she already paid.
D)   She is liable for paying the difference between the price she paid for the shares and the stated corporate value of the shares.
E)   She is liable for paying the difference between the price she paid for the shares and the stated corporate value of the shares plus a $10,000 penalty.F) D) and E)
G) A) and E)

Question 2

Which of the following are directors who are also officers or employees of the corporation?

Accepted Answer

A)   Approved directors
B)   Outside directors
C)   Inside directors
D)   Affiliated directors
E)   Unaffiliated directorsF) D) and E)
G) A) and B)

Question 3

A board of directors may take no action that benefits a director in his or her personal capacity.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following was the result in Patrick v.Allen,the case in the text involving whether the business judgment rule exempted directors of a corporation from liability for renting land to a private golf course,of which several directors were members,at a price sufficient to cover only property taxes?

Accepted Answer

A)   That the directors could not benefit from the rule because the business judgment rule applies to officers, not directors.
B)   That while the business judgment rule applies to directors, it did not apply to provide protection to the directors because they stood to benefit personally.
C)   That the business judgment rule applied to shield the directors from liability because no fraud was involved in the transaction.
D)   That the business judgment rule applied to shield the directors from liability because the directors received no money directly from the golf course.
E)   That the business judgment rule applied to shield the directors from liability because the transaction was properly recorded on the company's books and not hidden.F) All of the above
G) B) and C)

Question 5

Set forth and describe the two types of self-dealing in which officers and directors might engage and the penalty for doing so.

Accepted Answer

The first,business self-dealing,occurs w...

Question 6

Which of the following are outside directors who do not have business contacts with the corporation?

Accepted Answer

A)   Approved directors
B)   Associated directors
C)   Inside directors
D)   Affiliated directors
E)   Unaffiliated directorsF) C) and D)
G) B) and D)

Exam 39: Corporations: Directors, Officers, and Shareholders

Correct Answer
verified

Which of the following is true regarding liability of Frances,if any,for purchasing the stock at below its fair market value?

Correct Answer
verified

Which of the following are directors who are also officers or employees of the corporation?

Correct Answer
verified

Set forth and describe the two types of self-dealing in which officers and directors might engage and the penalty for doing so.

Correct Answer
verified
The first,business self-dealing,occurs w...
View Answer

Which of the following are outside directors who do not have business contacts with the corporation?

Correct Answer
verified

A board of directors may take no action that benefits a director in his or her personal capacity.

Correct Answer
verified

Exam 39: Corporations: Directors, Officers, and Shareholders

Correct AnswerverifiedShow Answer

Which of the following is true regarding liability of Frances,if any,for purchasing the stock at below its fair market value?

Correct AnswerverifiedShow Answer

Which of the following are directors who are also officers or employees of the corporation?

Correct AnswerverifiedShow Answer

Set forth and describe the two types of self-dealing in which officers and directors might engage and the penalty for doing so.

Correct AnswerverifiedThe first,business self-dealing,occurs w...View AnswerShow Answer

Which of the following are outside directors who do not have business contacts with the corporation?

Correct AnswerverifiedShow Answer

A board of directors may take no action that benefits a director in his or her personal capacity.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The first,business self-dealing,occurs w...
View Answer

Correct Answer
verified

Correct Answer
verified