Several Members of the Board of Directors of American Textile

question 43

Multiple Choice

Several members of the board of directors of American Textile Products (ATP) have proposed creating the position of lead director. What circumstances would most likely have initiated this proposal?

• A)ATP has been the initiator of several hostile takeovers in the last 2 years.
• B)The board has been successful in reducing the percentage of CEO pay that is composed of stock options.
• C)The CEO/chairperson of the board has been suspected of opportunistic behavior.
• D)The firm is traded on the New York Stock Exchange and must change its corporate governance to comply with the NYSE's new rules.

Grasp the legal nature of preincorporation subscriptions and their revocability.

Understand the duties and legal standing of promoters in corporate formation.

Grasp the concept of ultra vires acts and their significance in corporate operations.

Understand the implications of a corporation's citizenship and legal status.

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Definitions:

Luxury Car

A vehicle segment that is characterized by high-quality, superior performance, and premium features, often representing status and prestige.

Standardize

To establish and enforce uniform criteria, measurements, or techniques.

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale.

Marketing Mix

The collection of decisions regarding product, place, price, and promotion that companies make during the process of bringing a product or service to market.