Question 1

A duty that directors and officers have not to act adversely to the interests of the corporation and to subordinate their personal interests to those of the corporation and its shareholders is known as ________.

Accepted Answer

A)  duty of care
B)  duty of loyalty
C)  duty of obedience
D)  self-dealingE) None of the above
F) A) and D)

Question 2

A director's failure to properly supervise a subordinate who causes a loss to the corporation would be considered a breach of duty of care.

Accepted Answer

A) True 
 B)False

Question 3

A ________ is a date specified in corporate bylaws that determines whether a shareholder may vote at a shareholders' meeting.

Accepted Answer

A)  ballot date
B)  reinvestment date
C)  record date
D)  dividend dateE) A) and D)
F) B) and D)

Question 4

The business judgment rule protects shareholders for honest mistakes of judgment.

Accepted Answer

A) True 
 B)False

Question 5

One of the powers of a shareholder is his or her right to elect the board of directors.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is true of shareholders?

Accepted Answer

A)  They cannot enter into contracts that bind the corporation.
B)  They cannot vote to elect the board of directors.
C)  They cannot take active charge in deciding fundamental changes in the corporation.
D)  They are considered as agents of the corporation.E) A) and D)
F) B) and D)

Question 7

When is the annual shareholder's meeting held?

Accepted Answer

A)  according to the dates fixed in the bylaws
B)  at the whim of the board of directors
C)  only if and when there is a crisis
D)  only at the time of electing a new board of membersE) B) and C)
F) C) and D)

Question 8

Self-dealing is when shareholders use their position to deprive the board of directors of personal monetary gain.

Accepted Answer

A) True 
 B)False

Question 9

What is the CEO and CFO provision laid out by the Sarbanes-Oxley Act of 2002?

Accepted Answer

The CEO and chief financial officer (CFO...

Question 10

The Merrick and Stanley Corporation has 28, 000 outstanding shares.During a proposal for a merger, the shareholders decided to increase the quorum of the vote of shareholders to 75 percent, using the supramajority voting rule.How many minimum affirmative votes would be needed to pass the supramajority voting requirement?

Accepted Answer

A)  14, 001
B)  21, 280
C)  21, 000
D)  28, 000E) A) and D)
F) B) and D)

Question 11

To prove usurping by a director or an officer, a corporation must have had the financial ability to have taken advantage of the usurped opportunity.

Accepted Answer

A) True 
 B)False

Question 12

Usurping a corporate opportunity is a breach that can only be committed by a shareholder.

Accepted Answer

A) True 
 B)False

Question 13

The determination of whether a corporate director or officer has met his or her duty of care is measured in hindsight.

Accepted Answer

A) True 
 B)False

Question 14

An agreement that requires selling shareholders to sell their shares to the other shareholders or to the corporation at the price specified in the agreement is referred to as ________.

Accepted Answer

A)  preemptive sale
B)  right of first refusal
C)  buy-and-sell agreement
D)  shareholder voting agreementE) A) and B)
F) B) and C)

Question 15

Dividends are distribution of profits of the corporation to shareholders.

Accepted Answer

A) True 
 B)False

Question 16

The Kinderfelt Corporation has 15, 000 outstanding shares, out of which, Gordon owns 3, 000.Kinderfelt Corporation plans to raise more capital by issuing another 10, 000 shares of stock.With preemptive rights, how many of the new shares would Gordon have the right to buy before they are sold to the public?

Accepted Answer

A)  10, 000
B)  3000
C)  5000
D)  2000E) B) and D)
F) None of the above

Question 17

The Inkilwas Corporation has 30, 000 shares outstanding.A shareholders' meeting is duly called to amend the articles of incorporation, and 17, 501 shares are represented at the meeting.
-According to the RMBCA, what is the minimum outstanding shares that must be represented in this case to have a quorum?

Accepted Answer

A)  12, 001
B)  18, 501
C)  15, 001
D)  17, 501E) B) and C)
F) C) and D)

Question 18

The Sarbanes-Oxley Act requires CEO and CFO certification for annual and quarterly reports.

Accepted Answer

A) True 
 B)False

Question 19

Once the number of board of directors is fixed by the articles of incorporation, the number cannot be amended.

Accepted Answer

A) True 
 B)False

Question 20

If a fraud is committed by a member of the board of directors of a corporation, a written notice to the corporation from individual shareholders is not required to bring a derivative lawsuit.

Accepted Answer

A) True 
 B)False

Exam 37: Corporate Governance and the Sarbanes-Oxley Act

When is the annual shareholder's meeting held?

Correct Answer
verified

A ________ is a date specified in corporate bylaws that determines whether a shareholder may vote at a shareholders' meeting.

Correct Answer
verified

The Sarbanes-Oxley Act requires CEO and CFO certification for annual and quarterly reports.

Correct Answer
verified

Which of the following is true of shareholders?

Correct Answer
verified

What is the CEO and CFO provision laid out by the Sarbanes-Oxley Act of 2002?

Correct Answer
verified
The CEO and chief financial officer (CFO...
View Answer

Correct Answer
verified

A duty that directors and officers have not to act adversely to the interests of the corporation and to subordinate their personal interests to those of the corporation and its shareholders is known as ________.

Correct Answer
verified

Correct Answer
verified

Usurping a corporate opportunity is a breach that can only be committed by a shareholder.

Correct Answer
verified

If a fraud is committed by a member of the board of directors of a corporation, a written notice to the corporation from individual shareholders is not required to bring a derivative lawsuit.

Correct Answer
verified

Correct Answer
verified

To prove usurping by a director or an officer, a corporation must have had the financial ability to have taken advantage of the usurped opportunity.

Correct Answer
verified

A director's failure to properly supervise a subordinate who causes a loss to the corporation would be considered a breach of duty of care.

Correct Answer
verified

Once the number of board of directors is fixed by the articles of incorporation, the number cannot be amended.

Correct Answer
verified

Dividends are distribution of profits of the corporation to shareholders.

Correct Answer
verified

Self-dealing is when shareholders use their position to deprive the board of directors of personal monetary gain.

Correct Answer
verified

The determination of whether a corporate director or officer has met his or her duty of care is measured in hindsight.

Correct Answer
verified

An agreement that requires selling shareholders to sell their shares to the other shareholders or to the corporation at the price specified in the agreement is referred to as ________.

Correct Answer
verified

The business judgment rule protects shareholders for honest mistakes of judgment.

Correct Answer
verified

One of the powers of a shareholder is his or her right to elect the board of directors.

Correct Answer
verified

Exam 37: Corporate Governance and the Sarbanes-Oxley Act

When is the annual shareholder's meeting held?

Correct AnswerverifiedShow Answer

A ________ is a date specified in corporate bylaws that determines whether a shareholder may vote at a shareholders' meeting.

Correct AnswerverifiedShow Answer

The Sarbanes-Oxley Act requires CEO and CFO certification for annual and quarterly reports.

Correct AnswerverifiedShow Answer

Which of the following is true of shareholders?

Correct AnswerverifiedShow Answer

What is the CEO and CFO provision laid out by the Sarbanes-Oxley Act of 2002?

Correct AnswerverifiedThe CEO and chief financial officer (CFO...View AnswerShow Answer

Correct AnswerverifiedShow Answer

A duty that directors and officers have not to act adversely to the interests of the corporation and to subordinate their personal interests to those of the corporation and its shareholders is known as ________.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Usurping a corporate opportunity is a breach that can only be committed by a shareholder.

Correct AnswerverifiedShow Answer

If a fraud is committed by a member of the board of directors of a corporation, a written notice to the corporation from individual shareholders is not required to bring a derivative lawsuit.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

To prove usurping by a director or an officer, a corporation must have had the financial ability to have taken advantage of the usurped opportunity.

Correct AnswerverifiedShow Answer

A director's failure to properly supervise a subordinate who causes a loss to the corporation would be considered a breach of duty of care.

Correct AnswerverifiedShow Answer

Once the number of board of directors is fixed by the articles of incorporation, the number cannot be amended.

Correct AnswerverifiedShow Answer

Dividends are distribution of profits of the corporation to shareholders.

Correct AnswerverifiedShow Answer

Self-dealing is when shareholders use their position to deprive the board of directors of personal monetary gain.

Correct AnswerverifiedShow Answer

The determination of whether a corporate director or officer has met his or her duty of care is measured in hindsight.

Correct AnswerverifiedShow Answer

An agreement that requires selling shareholders to sell their shares to the other shareholders or to the corporation at the price specified in the agreement is referred to as ________.

Correct AnswerverifiedShow Answer

The business judgment rule protects shareholders for honest mistakes of judgment.

Correct AnswerverifiedShow Answer

One of the powers of a shareholder is his or her right to elect the board of directors.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The CEO and chief financial officer (CFO...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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