1. Fatima is on the board of directors of Tyson Inc. Fatima never attends board meetings and never inspects the books of the company. The board hires Alexis as the chief executive officer (CEO) of Tyson. For the next two years, while Alexis is serving as CEO, Alexis delegates important tasks to employees who are not trained for the tasks, fails to monitor the corporate bank accounts, and approves several high-dollar contracts without making reasonable inquiries about them. Alexis also enters into two contracts on behalf of the corporation with other companies in which she owns an interest. If Tyson suffers a loss because of Alexiss actions:

A. both Alexis and Fatima can be held liable.

B. only Alexis can be held liable, because all these decisions are her responsibility.

C. only Fatima can be held liable, because Alexis is protected by the business judgment rule.

D. neither Alexis nor Fatima can be held liable.

2. Tasmo Inc. and Velmo Inc. are both corporations that manufacture metal snaps, so they are competitors. Velmo has a huge part of the market share but also has huge outstanding debt. Tasmo is a newcomer to the market with minimal outstanding debt. Tasmo and Velmo decide to merge their companies to improve their market share and financial picture. After the merger is completed, Tasmo is the company that remains. Who will be responsible for Velmos outstanding debt?

A. Velmos debt will go away when the parties merge because the original corporation no longer exists.

B. Tasmo

C. Velmo must satisfy all outstanding debt before the merger can be completed.

D. Velmo

3. Summation Management Inc. is the parent company of several different hospitality management corporations. Sleep Inn Inc. seeks to become one of Summations subsidiaries. Summation and Sleep Inn enter an agreement whereby Sleep Inn will provide to Summation all its stock. For each five shares of Sleep Inn stock that Sleep Inn provides to Summation, Summation will provide to Sleep Inn one share of Summation stock. After the agreement, both Sleep Inn and Summation will remain as separate corporations. Sleep Inn and Summation have formed a:

A. share exchange.

B. consolidation.

C. short sale.

D.merger.

4. The Rustic Fig, an upscale restaurant, is going out of business. Penelopes Eatery agrees to buy all of Rustic Figs assets for $100,000. After the transaction is completed, Rustic Fig still has $200,000 in outstanding debt. Who is responsible for Rustic Figs debt?

A. Penelopes Eatery is responsible because this is a merger.

B. Rustic Fig is responsible because this is a merger.

C. Rustic Fig is responsible because this is a purchase of assets.

D. Penelopes Eatery is responsible because this is a purchase of assets.