If the articles of incorporation do not include a pre-emptive right, the firm has a choice of offering the issue of common stock directly to existing shareholders or to the public. True or False
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If the articles of incorporation do not include a pre-emptive right, the firm has a choice of offering the issue of common stock directly to existing shareholders or to the public.
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- The following are the characteristics of a close corporation, except: a. Any action by the directors of a close corporation without a meeting shall nevertheless be deemed valid. b. Pre-emptive right does not extend to all stock issuances. c. Deadlock in the board is settled by the SEC upon the written petition by any stockholder. d. A stockholder may withdraw and avail of his right of appraisal.all of the following are true about the issuance of non-voting common stock except a. it has been issued when the corporation wishes to raise capital through the sale of common stock but does not want to relinquish its voting control o b. it has been issued as a defense against an unfriendly takeover c it tends to result in the dilution of voting rights of current stockholders od. it tends to result in unequal voting rights among the shareholdersWhich of the following statements is CORRECT? A The stock of publicly owned companies does not need to be registered with and reported to a regulatory agency such as the SEC. B When a corporation's shares are owned by a few individuals, we say that the firm is publicly traded. C "Going public" establishes a firm's true intrinsic value and ensures that a liquid market will always exist for the firm's shares. D When stock in a closely held corporation is offered to the public for the first time, the transaction is called "going public, or an IPO," and the market for such stock is called the new issue or IPO market. E If a firm goes public, it will always raise additional new capital for the firm itself.
- A rights offering provides existing stockholders the opportunity to purchase shares of new issues to maintain their proportional ownership in the corporation. Select one: True FalseWhat statutory protection is offered to a third party who enters into a contract with a person purporting to act on behalf of a company which is not yet formed? What are bonus shares? Why may a company wish to reduce its Share Capital?Which of the following represents one of the basic rights of stockholders? a. Stockholders may sell their stock back to the company if they wish. b. Stockholders may authorize a business contract on behalf of the corporation. c. Stockholders may determine at what price the company issues stock. d. Stockholders may participate in management by voting on corporate matters.
- Which of the following statements is NOT CORRECT? (A) Going public establishes a firm's true intrinsic value and ensures that a liquid market will always exist for the firm's shares (B) Publicly owned companies have sold shares to investors who are not associated with management, and they must register with and report to a regulatory agency such as the SEC. (C) When stock in a closely held corporation is offered to the public for the first time, the transaction is called "going public." and the market for such stock is called the new issue market (D) It is possible for a firm to go public and yet not raise any additional new capital (E) When a coporation';s shares are owned by a few individuals who own most of the stock or are part of the firm's management, we say that the firm is "closaly, or privately, held.If a company’s constitution does not contain rules governing the forfeiture of shares, then the company: Select one: A. can register the shares in the name of another shareholder but cannot receive payment from that shareholder. B. may forfeit shares and reissue them at a later date. C. may forfeit shares but not reissue them. D. cannot forfeit shares.True or false Corporations are legal entities separate from their owners and offer the advantage of limited liability to the shareholders__________________________. Common stock carries voting privileges while preferred stock gives up this right to receive a dividend preference________________________. The board of directors who are responsible for dividends creates the liability for dividends on the declaration date ___________________________.
- Which of the following is not a characteristic of the commonstock of a large, publicly owned corporation?a. The shares may be transferred from one investor toanother without disrupting the continuity of businessoperations.b. Voting rights in the election of the board of directors.c. A cumulative right to receive dividends. d. After issuance, the market value of the stock is unre-lated to its par value.In the absence of restrictive provisions, what are the basicrights of stockholders of a corporation?Which of the following is a characteristic of common stock?a. The right to the residual income after creditors have been paidb. Limited liability in the case of the corporation going bankruptc. Voting rights to elect the board of directorsd. The right to maintain a proportionate share of ownership in the firm (when new shares are issued, stockholders have the first right of refusal)e. All of the above