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Exam 34: Corporate Management

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Question 21

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One of the directors of Independent Pallet Mill purchases 100 acres of timberland.In order for him to sell the timber from this land to Independent,what must he do? If he does not act properly in this situation,what duty would he violate,and what would be the result?

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The transaction will be valid if: the di...

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Question 22

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On the day a tender offer begins:

A) greenmail must be sent to the SEC.
B) a bidder must file a disclosure statement with the SEC.
C) assets of the target corporation must be locked up until an inventory is completed.
D) the SEC issues a binding order to the target company to file audited financial statements to the bidder.

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Question 23

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A director violates the corporate opportunity doctrine if he or she competes with the corporation,unless the disinterested directors approve of the director's actions.

Which of the following is the most appropriate term to use when describing management's duty to its shareholders?

Alex is a director of ABC,Inc.Alex wants to personally make a major purchase from Bravo Co.If it knew of the opportunity,ABC might be also interested in making that same purchase.Alex must:

A manager who first offers an opportunity to disinterested directors or shareholders who turn it down has the right to take advantage of the opportunity herself.

Corporate managers serve only one master,which is the best interest of the shareholders.

What is the definition of the business judgment rule?

Tender offers are regulated on the federal level by the National Labor Relations Act.

A corporate board's refusal to remove a "poison pill" was held reasonable in:

Management's duty to have a rational business purpose,avoid illegal behavior,and make informed decisions refers to its:

The Model Business Corporation Act states: "All corporate powers shall be exercised by or under the authority of,and the business and affairs of the corporation managed by or under the direction of its:

A finding by a court that a manager's decision had a rational business purpose does not necessarily protect the manager from a finding that he breached a duty of care.

RayCorp offers to buy out MegaCorp by paying $69 per share.LandCo,who also wants to buy MegaCorp,offers to pay $75 per share.When the bidding process is finally over,RayCorp has offered $85 per share and LandCo has offered to pay $90 per share.MegaCorp agrees to sell to RayCorp on grounds that,all things considered,the takeover by RayCorp would be better for the business.LandCo claims that MegaCorp should have sold the company to it since it was the highest bidder.Is LandCo correct?

A board of directors is considering whether to invest a great deal of money into research and development.Such a decision could have a long-term beneficial effect for the company's future.As an alternative,the board could forego the expenditure into research and development and buy back its own shares in order to immediately increase the company's reserves.Which of the below groups would most likely favor the option to increase the company's reserves and not invest in more research and development?

Jenny is an officer of a corporation.She made a difficult business decision.When challenged about her decision,the court ruled she had acted in good faith and that the business judgment rule applied.As such:

Anti-takeover tactics include all EXCEPT:

For the business judgment rule to apply:

Major Corporation wants to acquire control of Forte Company.What are some legal steps Forte can take to resist a hostile takeover?

If a court determines a manager's corporate decision amounted to self-dealing: