Which of the Following Is True About a "Buy-And-Sell" Agreement

question 90

Multiple Choice

Which of the following is true about a "buy-and-sell" agreement among corporate shareholders?

• A) They are most often entered into among shareholders of large, publicly-held corporations, since it is otherwise difficult to monitor the large number of stock transactions.
• B) They always provide for the purchase of shares by the corporation, in the event a shareholder desires to sell shares.
• C) They can provide for the sale of shares to either the corporation or to other shareholders at the price specified in the agreement.
• D) They usually also contain an agreement for a voting trust.
• E) They are enforceable, but only if the agreement provides for a fair price.

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Definitions:

Internal Rate of Return

A financial metric used to estimate the profitability of potential investments through a percentage rate return.

Mutually Exclusive Projects

Projects or investment options where the acceptance of one option necessarily excludes the others from consideration due to constraints such as budget.

Comparing

The act of evaluating two or more items to identify their similarities and differences.

Crossover Point

The point at which two or more different financial scenarios produce the same result or value.