corporation

Which of the following would not be considered a characteristic of a corporation?

• Separate legal entity

• Limited liability of shareholders

• Mutual agency

• Both a and c

Which of the following statements describing a corporation is not true?

• Shareholders are the owners of a stock corporation.

• When ownership of a corporation changes, the corporation does not terminate.

• Shareholders own the business and manage its day-to-day affairs.

• A corporation is subject to a greater governmental regulation than a single proprietorship or partnership.

The par value of a share capital

• is usually different from its market value

• is often higher for preference share than for ordinary share

• is an orbitrary amount assigned to a share of stock

• all of these

Which of the following is not one of the basic rights of a shareholder?

• The right to participate in earnings.

• The right to maintain one's proportionate interest in the corporation.

• The right to inspect the accounting records of the corporation.

• The right to participate in the proceeds from the sale of corporate assets upon liquidation of the company.

The ownership of share capital entitles ordinary shareholders to all of the following rights except:

• voting right.

• right to receive a proportionate share of assets in corporate liquidation.

• right to receive guaranteed dividends

• preemptive right

Which of the following statements about preference share capital is not true?

• Preference share capital usually carries the right to vote

• Preference share capital dividends are usually paid prior to payment of ordinary share capital dividends

• Preference share capital usually shares the right to receive assets pro-rata with the ordinary shareholders in case of corporate liquidation

• In addition to being paid dividends prior to those paid to ordinary shareholders, preference shareholders have the right to receive assets pro-rata with ordinary shareholders in the event of corporate liquidation.

The maximum number of shares of stock that the government gives a corporation permission to issue is the

• granted shares

• authorized shares

• issued shares

• outstanding shares

A preference share capital that may be exchanged for ordinary share capital is known as

• cumulative

• participating

• noncumulative

• convertible