BUL 3320 EXAM 3 CHAPTERS 39,40,
AND 51 QUESTIONS ND ANSWERS
Nathan is a director of USA Auto Parts, Inc. Under the standard of due care owed by
di¬rectors of a corporation, Nathan's decisions must be: - Correct Answers -Informed
and reasonable
Merina and Neil form Orchids, Inc. Ultimate responsibility for pol¬icy decisions
necessary to the management of corporate affairs rests with Orchids': - Correct
Answers -Board of directors
In his will, Bryce makes a gift of $12,000 to Teddy. This is: - Correct Answers -A general
bequest
Preemptive rights are - Correct Answers -designed to prevent dilution of a shareholder's
ownership in the company.
Ray owns Solar Solutions Corporation. Ray uses Solar Solution's funds to pay his
personal expenses, creates Thermal Power Corporation to engage in the same
business as Solar Solutions, transfers Solar Solution's assets to Thermal Power, and
petitions Solar Solutions into bankruptcy. This most likely warrants - Correct Answers -a
pierce of the corporate veil.
A codicil is a will substitute that avoids the cost of probate. - Correct Answers -False
A method of accomplishing a property transfer without a will is through the joint
ownership of property. - Correct Answers -True
Finn dies without a will. The distribution of Finn's property, including his beachfront
house in St. Pete Beach, is prescribed by: - Correct Answers -Florida's intestacy laws
A trust created in a will is: - Correct Answers -A testamentary trust
, Oliver incorporates his business as Grapes & Wine Corporation in California. He and his
group of shareholders intend to make a profit from their sales of fencing materials.
Grapes & Wine is: - Correct Answers -A private corporation
Merina and Neil form Orchids, Inc. Ultimate responsibility for pol¬icy decisions
necessary to the management of corporate affairs rests with Orchids': - Correct
Answers -Board of directors
Renee is a director of Sharp Focus Lens Corporation. With respect to Sharp Focus,
Renee can access the corporation's books and records. Renee has this access under: -
Correct Answers -The director's right of inspection
Dr. Smith advises his very ill patients to prepare a living will. The purpose of a living will
is to: - Correct Answers -express a desire not to have extreme medical treatment that
would prolong their lives.
There is a requirement that testators give their estate to the natural heirs. - Correct
Answers -False
Maria is a holder of preferred stock in Rio Grande Development, Inc. Maria has priority
over holders of Rio common stock as to: - Correct Answers -Payments of dividends
A foreign corporation normally does not need a certificate of authority to sell goods or
services via the Internet or by mail. - Correct Answers -True
Quinn is a holder of preferred stock in St. Pete Irrigation & Development, Inc. Quinn has
priority over holders of the common stock as to: - Correct Answers -Payment of
dividends
The proceeds, if any, of a derivative lawsuit go to - Correct Answers -The corporation
Restrictions on the transfer of shares in a close corporation are usually void. - Correct
Answers -False
Genevieve, a twenty-year-old, wants to execute a will before she undertakes a
backpacking trip to Europe. In most states, the legal age for executing a will is: - Correct
Answers -Eighteen
A director who does not hold a management position in the corporation is an outside
director. - Correct Answers -True
A publicly held corporation is any corporation whose shares are publicly traded in a
securities market. - Correct Answers -True
An executor is a personal representative named in a will. - Correct Answers -True
AND 51 QUESTIONS ND ANSWERS
Nathan is a director of USA Auto Parts, Inc. Under the standard of due care owed by
di¬rectors of a corporation, Nathan's decisions must be: - Correct Answers -Informed
and reasonable
Merina and Neil form Orchids, Inc. Ultimate responsibility for pol¬icy decisions
necessary to the management of corporate affairs rests with Orchids': - Correct
Answers -Board of directors
In his will, Bryce makes a gift of $12,000 to Teddy. This is: - Correct Answers -A general
bequest
Preemptive rights are - Correct Answers -designed to prevent dilution of a shareholder's
ownership in the company.
Ray owns Solar Solutions Corporation. Ray uses Solar Solution's funds to pay his
personal expenses, creates Thermal Power Corporation to engage in the same
business as Solar Solutions, transfers Solar Solution's assets to Thermal Power, and
petitions Solar Solutions into bankruptcy. This most likely warrants - Correct Answers -a
pierce of the corporate veil.
A codicil is a will substitute that avoids the cost of probate. - Correct Answers -False
A method of accomplishing a property transfer without a will is through the joint
ownership of property. - Correct Answers -True
Finn dies without a will. The distribution of Finn's property, including his beachfront
house in St. Pete Beach, is prescribed by: - Correct Answers -Florida's intestacy laws
A trust created in a will is: - Correct Answers -A testamentary trust
, Oliver incorporates his business as Grapes & Wine Corporation in California. He and his
group of shareholders intend to make a profit from their sales of fencing materials.
Grapes & Wine is: - Correct Answers -A private corporation
Merina and Neil form Orchids, Inc. Ultimate responsibility for pol¬icy decisions
necessary to the management of corporate affairs rests with Orchids': - Correct
Answers -Board of directors
Renee is a director of Sharp Focus Lens Corporation. With respect to Sharp Focus,
Renee can access the corporation's books and records. Renee has this access under: -
Correct Answers -The director's right of inspection
Dr. Smith advises his very ill patients to prepare a living will. The purpose of a living will
is to: - Correct Answers -express a desire not to have extreme medical treatment that
would prolong their lives.
There is a requirement that testators give their estate to the natural heirs. - Correct
Answers -False
Maria is a holder of preferred stock in Rio Grande Development, Inc. Maria has priority
over holders of Rio common stock as to: - Correct Answers -Payments of dividends
A foreign corporation normally does not need a certificate of authority to sell goods or
services via the Internet or by mail. - Correct Answers -True
Quinn is a holder of preferred stock in St. Pete Irrigation & Development, Inc. Quinn has
priority over holders of the common stock as to: - Correct Answers -Payment of
dividends
The proceeds, if any, of a derivative lawsuit go to - Correct Answers -The corporation
Restrictions on the transfer of shares in a close corporation are usually void. - Correct
Answers -False
Genevieve, a twenty-year-old, wants to execute a will before she undertakes a
backpacking trip to Europe. In most states, the legal age for executing a will is: - Correct
Answers -Eighteen
A director who does not hold a management position in the corporation is an outside
director. - Correct Answers -True
A publicly held corporation is any corporation whose shares are publicly traded in a
securities market. - Correct Answers -True
An executor is a personal representative named in a will. - Correct Answers -True
