Bart and Garth Own 600 and 200 Shares of the 1,000

question 63

Multiple Choice

Bart and Garth own 600 and 200 shares of the 1,000 outstanding shares of a corporation.Bart and Garth separately want to sell their shares.The shares were recently appraised at $240 per share,and there have been no significant changes or events affecting the value of the shares since the appraisal.Bart has found a buyer willing to pay $300 per share and Garth plans to sell his shares for $100 each.Assuming there is no express shareholders' agreement regarding sales of shares,what approvals must Bart and Garth obtain?

• A) They each must obtain the approval of the board of directors.
• B) Garth,but not Bart,must obtain the approval of the other shareholders for his sale.
• C) Bart,but not Garth,must obtain the approval of the other shareholders for his sale.
• D) Neither needs approval for his sale,but in the case of each sale the remaining shareholders must first have the opportunity to exercise their preemptive rights.
• E) Neither needs approval for his sale.

---

Definitions:

Supply Curve

A graph showing the relationship between the price of a good and the quantity of the good that suppliers are willing and able to produce at that price.

Equilibrium Level

The state in which market supply and demand balance each other, resulting in stable prices and quantities.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price in a specified time period.

Quantity Supplied

The quantity of a product or service that sellers are ready and capable of offering for sale at a specific price during a certain timeframe.