1. Which one of the following statements is TRUE?

a. A classified board is one in which an announcement requesting applications for board members appears in the newspaper.

b. Management is said to be entrenched when the senior managers are consuming excessive perquisites.

c. In a classified board, it is easier for dissidents to gain representation since fewer seats are up for election each year.

d. Inside directors are more concerned with shareholders' interests since they are more closely concerned with firm operations.

e. It is harder for dissidents to gain board seats if a company's board is classified.

2. Which one of the following statements is TRUE?

a. A classified board is one in which the board members serve anonymously.

b. Shareholders want to prevent takeovers because they don't want the company purchased out from under them.

c. Anti-takeover charter provisions are good for shareholders because they prevent a raider from stealing the company for a below-market price.

d. A shareholder rights provision encourages takeovers because shareholders have the right to approve the takeover if the terms are good.

e. Shareholders benefit when the company is acquired because they usually receive a higher price for their shares.