Question 1

In the Unocal Corp.v.Mesa Petroleum Co.case,the court said the board of directors could act with the primary goal of keeping themselves in office.

Accepted Answer

A) True 
 B)False  False

Question 2

Which of the following describes the duty of loyalty?

Accepted Answer

A)  It requires managers to make decisions they reasonably believe to be in the best interest of the corporation. 
B)  It prohibits making a decision that benefits the decision-maker at the expense of the corporation. 
C)  It requires consideration of the interests of the surrounding community. 
D)  It requires using care that an ordinarily prudent person would take in a similar situation. 
A)  It requires managers to make decisions they reasonably believe to be in the best interest of the corporation. 
B)  It prohibits making a decision that benefits the decision-maker at the expense of the corporation. 
C)  It requires consideration of the interests of the surrounding community. 
D)  It requires using care that an ordinarily prudent person would take in a similar situation. B

Question 3

In the Unocal Corp.v.Mesa Petroleum Co.case,the court:

Accepted Answer

A)  found the issuance of a preliminary injunction against Unocal's offer was proper. 
B)  ruled that a board of directors may not act primarily out of a desire to keep itself in office. 
C)  issued a permanent injunction against a selective exchange offer. 
D)  applied the Williams Act to analyze the target company's actions. 
A)  found the issuance of a preliminary injunction against Unocal's offer was proper. 
B)  ruled that a board of directors may not act primarily out of a desire to keep itself in office. 
C)  issued a permanent injunction against a selective exchange offer. 
D)  applied the Williams Act to analyze the target company's actions. B

Question 4

Courts are sympathetic to managers acting in the best interests of the corporation,even when the acts are illegal.

Accepted Answer

A) True 
 B)False

Question 5

The Lippman v.Shaffer case held that:

Accepted Answer

A)  the business judgment rule did not apply to the case. 
B)  the business judgment rule protected the board's decision to make the payments in question. 
C)  there was a contractual duty for the board to make the payments in question. 
D)  the motion for summary judgment was denied. 
A)  the business judgment rule did not apply to the case. 
B)  the business judgment rule protected the board's decision to make the payments in question. 
C)  there was a contractual duty for the board to make the payments in question. 
D)  the motion for summary judgment was denied.

Question 6

The "business judgment rule" has been replaced by "good faith statutes" in most states.

Accepted Answer

A) True 
 B)False

Question 7

The term "corporate manager" refers to:

Accepted Answer

A)  directors. 
B)  corporate officers. 
C)  Both of the above. 
D)  None of the above. 
A)  directors. 
B)  corporate officers. 
C)  Both of the above. 
D)  None of the above.

Question 8

Directors have the authority to manage the corporate business.

Accepted Answer

A) True 
 B)False

Question 9

The Williams Act regulates the conduct of the target company in a takeover situation.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is not true in applying the Williams Act?

Accepted Answer

A)  An individual or group acquiring more than 5 percent of a company's publicly traded stock must file a public disclosure document with the SEC. 
B)  A bidder must keep a tender offer open for at least 30 business days initially. 
C)  If any substantial change is made in the terms of the tender offer, it must be kept open for at least ten business days following the change. 
D)  Any shareholder may withdraw acceptance of the tender offer at any time while the offer is still open. 
A)  An individual or group acquiring more than 5 percent of a company's publicly traded stock must file a public disclosure document with the SEC. 
B)  A bidder must keep a tender offer open for at least 30 business days initially. 
C)  If any substantial change is made in the terms of the tender offer, it must be kept open for at least ten business days following the change. 
D)  Any shareholder may withdraw acceptance of the tender offer at any time while the offer is still open.

Question 11

Which of the following must be approved by the shareholders if a company is attempting to avoid a hostile takeover bid?

Accepted Answer

A)  White knights. 
B)  Staggered board of directors. 
C)  Supermajority voting. 
D)  All the above. 
A)  White knights. 
B)  Staggered board of directors. 
C)  Supermajority voting. 
D)  All the above.

Question 12

Which of the following is NOT a method to acquire control of a company?

Accepted Answer

A)  Buy stock from the shareholders through a tender offer. 
B)  Buy the company's assets. 
C)  Make an initial public offering. 
D)  Merge with the company. 
A)  Buy stock from the shareholders through a tender offer. 
B)  Buy the company's assets. 
C)  Make an initial public offering. 
D)  Merge with the company.

Question 13

Corporate responses to takeover attempts are largely governed by federal law.

Accepted Answer

A) True 
 B)False

Question 14

A manager who has engaged in self-dealing has violated the duty of loyalty to the corporation,unless the self-dealing also benefitted the corporation.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following statements is correct with respect to state efforts to offer protection to companies targeted for hostile takeovers?

Accepted Answer

A)  Courts offer the only legal protection to companies targeted for hostile takeovers. 
B)  Statutory law offers the only legal protection to companies. 
C)  Both statutory law and the state courts have provided some degree of protection for companies. 
D)  State courts and state statutes have offered no protection for companies targeted for hostile takeovers. 
A)  Courts offer the only legal protection to companies targeted for hostile takeovers. 
B)  Statutory law offers the only legal protection to companies. 
C)  Both statutory law and the state courts have provided some degree of protection for companies. 
D)  State courts and state statutes have offered no protection for companies targeted for hostile takeovers.

Question 16

A manager used her position in the company to develop a new business the company might have pursued.This is a breach of the:

Accepted Answer

A)  duty of care. 
B)  duty of non-competition. 
C)  duty of loyalty. 
D)  duty of recognition. 
A)  duty of care. 
B)  duty of non-competition. 
C)  duty of loyalty. 
D)  duty of recognition.

Question 17

The Williams Act:

Accepted Answer

A)  is designed to regulate the conduct of those attempting to take over a company. 
B)  is designed to regulate the conduct of the target company subject to a takeover. 
C)  prohibits corporate defensive tactics. 
D)  None of the above. 
A)  is designed to regulate the conduct of those attempting to take over a company. 
B)  is designed to regulate the conduct of the target company subject to a takeover. 
C)  prohibits corporate defensive tactics. 
D)  None of the above.

Question 18

Identify the three types of masters corporate managers serve and discuss the goals of each.

Accepted Answer

Managers serve themselves,shareholders,a

Question 19

A speculator plans to acquire control of Kelp Corporation and then resell it at a profit.A speculator is sometimes known as a corporate raider.

Accepted Answer

A) True 
 B)False

Question 20

Discuss the purposes of the "business judgment rule."

Accepted Answer

The "business judgment rule" is designed

Exam 34: Corporate Management

In the Unocal Corp.v.Mesa Petroleum Co.case,the court said the board of directors could act with the primary goal of keeping themselves in office.

Which of the following describes the duty of loyalty?

In the Unocal Corp.v.Mesa Petroleum Co.case,the court:

Courts are sympathetic to managers acting in the best interests of the corporation,even when the acts are illegal.

The Lippman v.Shaffer case held that:

The "business judgment rule" has been replaced by "good faith statutes" in most states.

The term "corporate manager" refers to:

Directors have the authority to manage the corporate business.

The Williams Act regulates the conduct of the target company in a takeover situation.

Which of the following is not true in applying the Williams Act?

Which of the following must be approved by the shareholders if a company is attempting to avoid a hostile takeover bid?

Which of the following is NOT a method to acquire control of a company?

Corporate responses to takeover attempts are largely governed by federal law.

A manager who has engaged in self-dealing has violated the duty of loyalty to the corporation,unless the self-dealing also benefitted the corporation.

Which of the following statements is correct with respect to state efforts to offer protection to companies targeted for hostile takeovers?

A manager used her position in the company to develop a new business the company might have pursued.This is a breach of the:

The Williams Act:

Identify the three types of masters corporate managers serve and discuss the goals of each.

A speculator plans to acquire control of Kelp Corporation and then resell it at a profit.A speculator is sometimes known as a corporate raider.

Discuss the purposes of the "business judgment rule."

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