Exam 34: Financial Structure of Corporations

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When a corporation issues no par value stock, the entire consideration received constitutes stated capital except that amount allocated in a manner permitted by law to capital surplus or paid-in surplus.

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(True/False)

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Question 1

Correct Answer:

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True

A distribution may be in the form of:

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(Multiple Choice)

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Question 2

Correct Answer:

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How does the Revised Act define the term "distribution"?

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(Essay)

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Question 3

Correct Answer:

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"A direct or indirect transfer of money or other property (except for its own shares) or incurrence of indebtedness by a corporation to or for the benefit of its shareholders with respect to any of its shares.A distribution may be in the form of a declaration or payment of a dividend; a purchase, redemption, or other acquisition of shares; a distribution of indebtedness; or otherwise." Neither a stock dividend nor a stock split is a distribution.

The 2016 RMBCA provides a statutory ratification procedure for shares that may have been improperly issued.Upon the effectiveness of the ratification, the overissued shares are valid shares as of

(Multiple Choice)

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Question 4

Dividends are ordinarily paid in cash, but may be paid in property.

(True/False)

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Question 5

Treasury stock is issued but not outstanding.

(True/False)

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Question 6

Which of the following is correct with regard to common stock?

(Multiple Choice)

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Question 7

The earned surplus test for the issuance of dividends by a corporation is less restrictive than the surplus test.

(True/False)

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Question 8

The Revised Act, the 1980 Amendments to the MBCA, and over half of the states have eliminated the concept of:

(Multiple Choice)

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Question 9

If Daniels makes a $10,000 investment in a debenture issued by Southern Company, he is now an unsecured creditor of Southern Company.

(True/False)

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Question 10

Caverun Co.has two classes of stock.The company may:

(Multiple Choice)

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Question 11

Max buys shares of newly issued Z Corp.stock for $30 per share and pays $1,000 cash, a car worth $2,000, and a promissory note for $3,000.Under the Revised Act, how many shares of stock could validly be sold?

(Multiple Choice)

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Question 12

Clayton Tile has a secured bond on specific property of Ceramic Creations, Inc.Clayton's claim against Ceramic is enforceable only against that specific property.

(True/False)

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Question 13

Yukon Corporation purchases 1,000 shares of its own stock from Jones at a price of $50 a share.These shares, which are now issued but not outstanding, are known as:

(Multiple Choice)

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Question 14

If a "liquidation preference" is provided, preferred stock usually has priority over common stock to the extent the articles of incorporation state.

(True/False)

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Question 15

An investor has the right to transfer his investment securities by sale, but not by gift or pledge.

(True/False)

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Question 16

The board of directors of Boyd Corporation declared distributions of $5 per share.If these dividends are not paid, a shareholder can bring suit to require payment.

(True/False)

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Question 17

What are the two major issues regarding payment for shares?

(Essay)

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Question 18

The shareholders normally determine the price for which shares will be issued unless the charter permits the board of directors to set the price.

(True/False)

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Question 19

The most customary type of dividend is a:

(Multiple Choice)

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Question 20

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Exam 34: Financial Structure of Corporations

When a corporation issues no par value stock, the entire consideration received constitutes stated capital except that amount allocated in a manner permitted by law to capital surplus or paid-in surplus.

A distribution may be in the form of:

How does the Revised Act define the term "distribution"?

The 2016 RMBCA provides a statutory ratification procedure for shares that may have been improperly issued.Upon the effectiveness of the ratification, the overissued shares are valid shares as of

Dividends are ordinarily paid in cash, but may be paid in property.

Treasury stock is issued but not outstanding.

Which of the following is correct with regard to common stock?

The earned surplus test for the issuance of dividends by a corporation is less restrictive than the surplus test.

The Revised Act, the 1980 Amendments to the MBCA, and over half of the states have eliminated the concept of:

If Daniels makes a $10,000 investment in a debenture issued by Southern Company, he is now an unsecured creditor of Southern Company.

Caverun Co.has two classes of stock.The company may:

Max buys shares of newly issued Z Corp.stock for $30 per share and pays $1,000 cash, a car worth $2,000, and a promissory note for $3,000.Under the Revised Act, how many shares of stock could validly be sold?

Clayton Tile has a secured bond on specific property of Ceramic Creations, Inc.Clayton's claim against Ceramic is enforceable only against that specific property.

Yukon Corporation purchases 1,000 shares of its own stock from Jones at a price of $50 a share.These shares, which are now issued but not outstanding, are known as:

If a "liquidation preference" is provided, preferred stock usually has priority over common stock to the extent the articles of incorporation state.

An investor has the right to transfer his investment securities by sale, but not by gift or pledge.

The board of directors of Boyd Corporation declared distributions of $5 per share.If these dividends are not paid, a shareholder can bring suit to require payment.

What are the two major issues regarding payment for shares?

The shareholders normally determine the price for which shares will be issued unless the charter permits the board of directors to set the price.

The most customary type of dividend is a:

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Civil Dispute Resolution

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Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

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Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance, Breach, and Discharge

Contract Remediespart Iv: Sales

Introduction to Sales and Leases

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Transfer of Title and Risk of Loss

Product Liability: Warranties and Strict Liability

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Relationship of Principal and Agent

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Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature and Formation of Corporations

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Interests in Real Property

Transfer and Control of Real Property

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