Multiple Choice Identify the choice that best completes the statement or answers the question

_____ 20. Which of the following is not a requirement of a Subchapter S corporation?

a. It must be a domestic corporation.

b. It must have no more than 50 shareholders.

c. A corporation or partnership cannot be a shareholder.

d. It may have only one class of stock..

_____ 22. In the case of Metropolitan Life Insurance Company v. RJR Nabisco,1nc., the court:

a. considered extrinsic evidence to evaluate the scope of an implied duty of good faith.

b. examined the indentures themselves to determine the agreement of the parties.

c. held that the indentures included an implied duty that prevented the incurring of new debt to facilitate the LBO.

d. Both (a) and (b) are correct.

_____ 24. Redemption is not permitted if the corporation:

a. asks for an injunction.

b. would, by that action, reduce total assets below the stated capital amount.

c. has outstanding treasury shares.

d. is likely to be rendered insolvent.