Legal 18.5

6,000 votes

A corporation has 5,000 shares of stock issued and outstanding. The minority shareholders hold 2,000 shares. The majority shareholders hold the other 3,000 shares. Three board members are to be elected by cumulative voting. The minority shareholders will have:

amend the articles of incorporation or the corporate bylaws.

A major power held by shareholders is the power to:

proxy

A written agreement between a stockholder and another party in which the stockholder authorizes the other party to vote the stockholder's shares in a certain manner is a:

minority shareholders can sue for damages

Bailey, a majority shareholder in Best Bikes, Corp., owns enough shares to exercise de facto control over the corporation. If Bailey uses her control to "freeze out" minority shareholders and to exclude minority shareholders from benefits of the corporation, then:

vote to amend the articles of incorporation or bylaws.

Brad is a shareholder of Concert Promotion Corporation. As a shareholder, Brad can:

up to 20 shares, which is 2 percent of the new issues.

Connie Fernandez owns 100 shares of Prodigy Corporation, which is 2 percent of the total shares. The corporation has given shareholders preemptive rights. Prodigy Corporation issues 1,000 new shares of stock. Before Prodigy Corporation can offer the new stock to any outside buyers, Fernandez can purchase:

False

Damages awarded in a shareholder's derivative suit go to the shareholder personally.

50% of the outstanding shaes.

For shareholders to conduct business at a meeting, a quorum must be present. Generally, a quorum exists when the shareholders in attendance hold more than:

$500

JKL Corporation has 4,000 shares of stock outstanding. Cho owns 200 shares. JKL declares a $10,000 dividend. The amount of dividend Cho will receive is:

the corporation, because Schachter's actions deprived the entire corporation, not just Kulik, of profits.

Jacob Schachter and Herbert Kulik, the founders of Ketek Electric Corp., each owned 50 percent of the corporation's shares and served as the corporation's only officers. Arnold Glenn, as trustee, and Kulik brought a shareholder's derivative suit in a New York state court against Schachter, alleging that Schachter had diverted Ketek assets and opportunities to Hoteltron Systems, Inc., a corporation wholly owned by Schachter. The court held that Schachter had wrongfully diverted the funds. On the issue of the damages, Kulik argued that they should be awarded to him personally so that Schachter, as a shareholder of Ketek, would not be able to share in the proceeds of the award. The court most likely granted damages to:

True

Only certain funds are legally available for paying dividends.

the corporate books and records, but only for a proper purpose.

Shareholders have a right to inspect:

allow minority shareholders a greater chance at representation on the board of directors.

The reason most states either permit or require the use of cumulative voting when electing directors is to:

less than the stated value of the shares.

Watered stock is shares of stock issued by a corporation for which the corporation receives as payment:

False

While directors and officers owe fiduciary duties, it is impossible for a shareholder to owe fiduciary duties.