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Exam 28: Government Regulation of the Corporate Entity

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Question 1

Multiple Choice

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The ________ Act specifically addresses promotional allowances.

A) Clayton
B) Robinson-Patman
C) Federal Trade Commission
D) Sherman

E) C) and D)
F) B) and C)

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Question 2

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The power of the states to regulate commerce comes from a state's federal power.

A) True
B) False

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Question 3

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Yanasko wanted to purchase Raymond-Mason Inc.When he approached the board of directors about the merger,they told him that they were not interested.Yanasko then suggested an asset acquisition.Again,the board refused.What measure could Yanasko take to sidestep the board of directors and obtain control of Raymond-Mason? Explain.

If ABC Co.is to merge with XYZ Co. ,typically a unanimous vote (100%)of the shareholders will be required.

A ________ means the exclusive control of a market by a business enterprise.

Ajax Co.has six directors.Three of the directors favor corporate expansion and three directors want to keep Ajax at its current size and distribute the surplus profit.How will a court likely resolve this deadlock?

Small Co.is afraid that it will become the subject of a takeover bid and lose its independent existence.Can Small Co.take the help of a friendly suitor to offset any takeover bid? If so,how?

A leveraged buyout (LBO)always includes junk bonds as part of the investment.

In a(n) ________,the buyer purchases enough shares in a corporation to gain voting control of that corporation.

Herrera already owns 20% of the stock of the Higgins Corp.and plans to use his own cash to purchase another 30% of Higgins.Herrera's intent is to acquire enough Higgins stock to mount a takeover.According to law,Herrera is required to file a statement with the SEC.What information must Herrera include in the statement?

Some states require that a merger involving an LLC have a ________,rather than the two-thirds majority required of corporations.

The ________ Act prohibits contracts,combinations,and conspiracies in restraint of trade.

If ABC Co.and XYZ Co.agree to charge consumers a fixed,but fair,price for their products,the courts will judge the legality of the practice based on a per se approach,

Under the quick-look standard,a court will determine whether an objective observer with elementary financial knowledge see that the arrangement under scrutiny could damage competition.

The Pillsbo Corporation failed to file annual reports for three years.The Secretary of State in the state where Pillsbo incorporated told Pillsbo's chief executive officer that she was going to ask the state attorney general to bring a quo warranto action against Pillsbo for failing to file the annual reports.Can she legally do so for this reason? Why or why not?

Congress passed the Clayton Act to police and prohibit specific business practices such as interlocking directorates.

A ________ might be used by target management if the target owns an irreplaceable piece of property,the sale of which would seriously devalue the overall worth of the target.

An attempt at a(n) ________ occurs when one corporation makes a tender offer to the shareholders of another corporation.

The Wickard v.Filburn (1824)case held that commercial activity that occurred within a state was subject to federal regulation if that completely in-state activity affected interstate commerce.

NewCo.plans to sell stock to investors with a website offer form.Discuss the federal securities regulations,if any,with which NewCo.must comply.