ABC LtdIs a Closely Held Corporation

question 61

Multiple Choice

ABC Ltd.is a closely held corporation.Two of the shareholders serve as directors.As directors,they voted to issue themselves more shares to increase their voting control of the corporation.Which of the following provisions would aid the other shareholders?

• A)indoor-management rule
• B)pre-emptive right provisions
• C)derivative-action provisions
• D)relief-from-oppression provisions
• E)dissent procedure

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Definitions:

Forecast Risk

The risk associated with the likelihood that the forecasted figures will not align with the actual results, also known as projection risk.

Accounting Break-even

The point at which total revenues equal total expenses, and the company neither makes a profit nor incurs a loss.

Operating Cash Flow

The cash that a business produces from its regular business activities, essential for maintaining daily operations, paying bills, and funding investments.

Depreciation Expense

A non-cash charge that reduces the value of fixed assets due to wear, tear, or obsolescence over time.