Business and Personal Law

Chapter 17: Operating a Corporation

Online Practice Tests

1
Corporations are managed by directors who
A)are responsible for making broad policy decisions in the running of the corporation.
B)are considered the owners of the corporation.
C)are entitled to notice of all regular and special meetings.
D)deal with the day-to-day operations of the business.
2
Corporate officers
A)are responsible for making broad policy decisions in the running of the corporation.
B)are considered the owners of the corporation.
C)suggest business policy.
D)are appointed by the board of directors.
3
A derivative suit is a lawsuit a sharehold can bring
A)against a corporation for denying his or her rights as a shareholder.
B)on behalf of the corporation to correct an injury to the corporation.
C)in order to examine the corporate books and records.
D)when dividends are being withheld.
4
Shareholders have the right to
A)participate in the board of director's meetings.
B)vote only if they own preferred stock.
C)transfer or sell their stock.
D)receive dividends when the corporation has made a profit.
5
Insider trading occurs when
A)a corporate officer or director buys or sells shares in a corporation based on firsthand information that is not available to the general public.
B)a shareholder sells stock within one week of the annual meeting.
C)the corporate directors fail to follow the business judgment rule when setting policy.
D)a single shareholder buys a majority interest in the corporation.
6
In an asset acquistion
A)one corporation agrees to purchase the property of a second corporation.
B)an individual corporation purchases enough shares of stock to control it.
C)two or more companies join to form a new corporation.
D)one corporation continues its existence and absorbs another corporation.
7
When two or more companies join together to form a new corporation, it is called a(n)
A)merger.
B)consolidation.
C)conglomerate.
D)asset acquisition.
8
In a stock acquisition, the corporation making the tender offer is referred to as the
A)prospectus.
B)hostile bidder.
C)target.
D)suitor.
9
The largest and best known stock exchange is the
A)American Stock Exchange.
B)World Stock Exchange.
C)New York Stock Exchange.
D)NASDAQ.
10
If a "quo warranto" action is brought against a corporation, it could
A)be part of a involuntary merger.
B)lose its charter.
C)become a franchise.
D)lose the opportunity for proxy voting.
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