18 Questions
Which of the following arrangements is NOT an alternative to setting up a corporation, as suggested in the text?
Alice incorporates a company, with Bart as a shareholder and Chris as a lender.
What is the primary purpose of company law?
Both a and b.
In the example given, which stakeholder represents the intellectual property holder?
Alice
Which of the following statements is NOT true about the example provided in the text?
Bart is the heir to an industrial dynasty that owns a manufacturing facility.
Based on the text, which of the following best represents the concept of a company?
A box that defines the rights and liabilities of stakeholders.
According to the example, which stakeholder combination could potentially form a partnership?
Alice, Bart, and Chris
What is the primary purpose of corporate law?
To ensure that corporate transactions benefit all stakeholders involved
In the case of Dodge v. Ford, what was the relief sought by the plaintiffs?
To require Ford Motor Company to declare a dividend of at least 75% of its cash surplus
What was the issue in the case of Dodge v. Ford?
The refusal of directors to declare a higher dividend despite the company's large cash surplus
What is the shareholder wealth maximization rule?
The maximization of the current price of corporate shares
In the case of Dodge v. Ford, what was the percentage of shares held by the plaintiffs in Ford Motor Company?
10%
What was the approximate cash surplus of Ford Motor Company at the time of the Dodge v. Ford case?
$112 million
According to Ford's argument, what was his primary motivation for reinvesting profits into the company?
To employ more workers and spread the benefits of the industrial system
Which stakeholder group did the Dodge brothers claim Ford's policy would jeopardize?
Shareholders
Based on Ford's response, which of the following stakeholder groups did he prioritize?
Employees and customers
What was the Dodge brothers' primary concern regarding Ford's policy?
Financial risk and uncertain economic conditions
What was the court's ruling regarding Ford's policy?
The court ordered Ford to pay dividends to shareholders
Which of the following best represents the central conflict presented in the text?
Shareholder primacy versus stakeholder theory
This quiz covers the basic legal mechanisms that individuals can use to form a profit generating activity without creating a company. The quiz explores scenarios involving individuals with different resources and backgrounds. Join the session to test your knowledge of Company Law!
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