A Corporation May Sue a Director Owning More Than Ten

question 31

Multiple Choice

A corporation may sue a director owning more than ten (10) percent of any class of corporate stock who makes a profit by selling any such stock:

• A) if the sale is made more than six (6)months after the original purchase of the stock by the director.
• B) only if the stock was originally acquired with fraudulent intent.
• C) only if the stock was sold with fraudulent intent.
• D) if the sale was made less than six (6)months after the original purchase of the stock by the director.

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Definitions:

Dependent Variable

A variable that responds to some causal factor; total cost is the dependent variable, as represented by the letter Y, in the equation Y = a + bX.

Fixed Cost

Costs that do not change with the level of production or sales, such as rent or salaries.

Total Expense

The sum of all costs and expenses associated with the operations of a business.

Level Of Activity

A measure of the amount of output or work performed, often used in accounting to allocate fixed costs or in operational planning.