LGS 200 UPDATED EXAMS ALL QUESTIONS AND
ANSWERS SET A+
✔✔liquidation preference - ✔✔the right to be paid a stated dollar amount if a
corporation is dissolved and liquidated
✔✔cumulative preferred stock - ✔✔stock for which any missed dividend payments must
be paid in the future to the preferred shareholders before the common shareholders can
receive any dividends
✔✔Participating Preferred Stock - ✔✔Stock that allows the preferred stockholder to
participate in the profits of the corporation along with the common stockholders.
✔✔convertible preferred stock - ✔✔stock that permits the preferred stockholders to
convert their shares into common stock
✔✔redeemable preferred stock (callable preferred stock) - ✔✔stock that permits a
corporation to buy back the preferred stock at some future date
✔✔Authorized Shares - ✔✔The number of shares provided for in the articles of
incorporation
✔✔Issued Shares - ✔✔authorized shares that have been sold by a corporation
✔✔Unissued Shares - ✔✔authorized shares that have not been sold by the corporation
✔✔Outstanding Shares - ✔✔Shares that are in shareholder hands, whether originally
issued shares or reissued treasury shares. Only outstanding shares have the right to
vote.
✔✔Debt securities (Fixed income Securities) - ✔✔securities that establish a debtor-
creditor relationship in which the corporation borrows money from the investor to whom
a debt security is issued
, ✔✔Debenture - ✔✔a long-term unsecured debt instrument that is based on a
corporation's general credit standing
✔✔Bond - ✔✔a long-term debt security that is secured by some form of collateral
✔✔Note - ✔✔a debt security with a maturity of five years or less
✔✔indenture agreement (indenture) - ✔✔a contract between a corporation and a holder
that contains the terms of a debt security
✔✔Shareholders - ✔✔Owners of a corporation who elect the board of directors and
vote on fundamental changes in the corporation
✔✔Annual Shareholders' Meeting - ✔✔a meeting of the shareholders of a corporation
that must be held by the corporation to elect directors and to vote on other matters
✔✔special shareholders' meetings - ✔✔Meetings of shareholders that may be called to
consider and vote on important or emergency issues, such as a proposed merger or
amending the articles of incorporation.
✔✔Proxy - ✔✔a shareholder's authorizing of another person to vote the shareholder's
shares at the shareholder's meetings in the event of the shareholder's absence
✔✔quorum to hold a meeting of the shareholders - ✔✔The required number of shares
that must be represented in person or by proxy to hold a shareholders' meeting. The
RMBCA establishes a majority of outstanding shares as a quorum.
✔✔Supermajority voting requirement - ✔✔A requirement that a greater than majority of
shares constitutes a quorum of the vote of the shareholders
✔✔straight voting (noncumulative voting) - ✔✔a system in which each shareholder
votes the number of shares he or she owns on candidates for each of the positions
open
✔✔Cumulative voting - ✔✔a system in which a shareholder can accumulate all of his or
her votes and vote them all for one candidate or split them among several candidates
✔✔Dividend - ✔✔A distribution of profits of the corporation to shareholders
✔✔piercing the corporate veil (alter ego doctrine) - ✔✔A doctrine that says if a
shareholder dominates a corporation and uses it for improper purposes, a court of
equity can disregard the corporate entity and hold the shareholder personally liable for
the corporation's debts and obligations
ANSWERS SET A+
✔✔liquidation preference - ✔✔the right to be paid a stated dollar amount if a
corporation is dissolved and liquidated
✔✔cumulative preferred stock - ✔✔stock for which any missed dividend payments must
be paid in the future to the preferred shareholders before the common shareholders can
receive any dividends
✔✔Participating Preferred Stock - ✔✔Stock that allows the preferred stockholder to
participate in the profits of the corporation along with the common stockholders.
✔✔convertible preferred stock - ✔✔stock that permits the preferred stockholders to
convert their shares into common stock
✔✔redeemable preferred stock (callable preferred stock) - ✔✔stock that permits a
corporation to buy back the preferred stock at some future date
✔✔Authorized Shares - ✔✔The number of shares provided for in the articles of
incorporation
✔✔Issued Shares - ✔✔authorized shares that have been sold by a corporation
✔✔Unissued Shares - ✔✔authorized shares that have not been sold by the corporation
✔✔Outstanding Shares - ✔✔Shares that are in shareholder hands, whether originally
issued shares or reissued treasury shares. Only outstanding shares have the right to
vote.
✔✔Debt securities (Fixed income Securities) - ✔✔securities that establish a debtor-
creditor relationship in which the corporation borrows money from the investor to whom
a debt security is issued
, ✔✔Debenture - ✔✔a long-term unsecured debt instrument that is based on a
corporation's general credit standing
✔✔Bond - ✔✔a long-term debt security that is secured by some form of collateral
✔✔Note - ✔✔a debt security with a maturity of five years or less
✔✔indenture agreement (indenture) - ✔✔a contract between a corporation and a holder
that contains the terms of a debt security
✔✔Shareholders - ✔✔Owners of a corporation who elect the board of directors and
vote on fundamental changes in the corporation
✔✔Annual Shareholders' Meeting - ✔✔a meeting of the shareholders of a corporation
that must be held by the corporation to elect directors and to vote on other matters
✔✔special shareholders' meetings - ✔✔Meetings of shareholders that may be called to
consider and vote on important or emergency issues, such as a proposed merger or
amending the articles of incorporation.
✔✔Proxy - ✔✔a shareholder's authorizing of another person to vote the shareholder's
shares at the shareholder's meetings in the event of the shareholder's absence
✔✔quorum to hold a meeting of the shareholders - ✔✔The required number of shares
that must be represented in person or by proxy to hold a shareholders' meeting. The
RMBCA establishes a majority of outstanding shares as a quorum.
✔✔Supermajority voting requirement - ✔✔A requirement that a greater than majority of
shares constitutes a quorum of the vote of the shareholders
✔✔straight voting (noncumulative voting) - ✔✔a system in which each shareholder
votes the number of shares he or she owns on candidates for each of the positions
open
✔✔Cumulative voting - ✔✔a system in which a shareholder can accumulate all of his or
her votes and vote them all for one candidate or split them among several candidates
✔✔Dividend - ✔✔A distribution of profits of the corporation to shareholders
✔✔piercing the corporate veil (alter ego doctrine) - ✔✔A doctrine that says if a
shareholder dominates a corporation and uses it for improper purposes, a court of
equity can disregard the corporate entity and hold the shareholder personally liable for
the corporation's debts and obligations
