Ch. 44 Shareholder rights

Question 1

1. Votes
2. Receives Dividends if declared
3. Inspects books at reasonable times

Answer 1

RIghts of Common Shareholders

Question 2

Minimum acquisition price

Answer 2

Par value

Question 3

found by dividing the value of corporate assets by the number of shares outstanding

Answer 3

book value

Question 4

documents evidencing shareholders ownership of stock

Answer 4

certificate of stock

Question 5

an unsecured bond of a corporation with no specific corporate asset pledged as security for payment.

Answer 5

Debenture

Question 6

contract or agreement to buy a specific number and kind of shares when they are issued by a corporation

Answer 6

Stock Subscription

Question 7

stock exchange price

Answer 7

market value

Question 8

priority to dividends and liquidation rights(right to assets)

Answer 8

Preferred stock

Question 9

some larger debt offerings are structured to require and indentured trustee and possibly a sinking fund

Answer 9

Bond Indentures

Question 10

1.preference in receipt of dividends cum and non
2. participation rights
3. convertables

Answer 10

particular preferred preferences

Question 11

Bonds, notes, bills, debentures

Answer 11

types of corporate debts

Question 12

some larger debt offerings are structured to require an indentured trustee and possibly a sinking fund

Answer 12

Bond Indenture

Question 13

1. stock subscription
2. transfer of existing shares

Answer 13

ways stocks are required

Question 14

1. sale
2. gift
3. inheritance
4. execution to pay creditors- involuntary

Answer 14

transfer of existing shares

Question 15

1. negotiate stock certificate
2. physical transfer of certificate
3. notation of transfer on corporate minute book

Answer 15

transfer mechanics

Question 16

1. Must be in writing- statute of frauds
2. may be either pre-incorporation or post incorporation

Answer 16

Requirements of stock subscription agreement

Question 17

Proxy agreements and voting trusts

Answer 17

-agreements to have someone else vote your stock must be in writing
- proxy agreements are single use, while voting trust may extend for many yeats

Question 18

Rules of stock transfer restrictions

Answer 18

restrictions on the sale of stock must be noted on the face of the stock certificate

Question 19

What type of corporate voting is considered best practice

Answer 19

cumulative

Question 20

preemptive rights

Answer 20

current shareholders have the first rights to additional share they they may purchase up the the same percentage of total shares they have now

Question 21

Two types of lawsuits available to shareholders

Answer 21

1. Minority shareholder suits
2. shareholder derivative suits

Question 22

piercing the corporate veil to hold shareholders liable

Answer 22

1. alter ego theory - joe the plumber
2. abuse of the corporate form- taxi example
3. insufficient corporate capitalization- no assets

Question 23

1. wage claims
2. unpaid stock subscriptions
3. unauthorized dividends

Answer 23

Other exceptions to limited liability of shareholders