QUESTION 1

1. Iron Islands LLC has assets of $6 million and liabilities of $2 million.Is the LLC an accredited investor?
2. Yes, the LLC is an accredited investor.
3. No, the LLC has insufficient net assets.
4. No, LLCs cannot be accredited investors.

4 points

QUESTION 2

1. Dany owns 34% of the outstanding shares of Steel Wheel Inc.Jon owns the remaining 66% of the shares.Steel Wheel Inc. has a 5-director board.Will she be able to control one or more board seats?
2. a.Yes.
3. b.Only if the Steel Wheel Inc. corporate documents provide for cumulative voting.
4. c.No.

4 points

QUESTION 3

1. Which type of merger involves only two corporations?
2. a.Reverse triangular merger.
3. b.Consolidation.
4. c.Direct/forward merger.
5. d.Forward triangular merger.

4 points

QUESTION 4

1. What is the term for using debt (often using the target's own assets as collateral) to finance an acquisition?
2. a.Proxy contest.
3. b.Beachhead acquisition.
4. c.Third-party consent.
5. d.Leveraged buyout (LBO).

4 points

QUESTION 5

1. Is an investment in an LLC a "security" under the '33 Act?
2. a.Yes, LLC membership interest is expressly included in the '33 Act's list of securities.
3. b.Only if the LLC membership interest qualifies under the Howey test as an investment contract.
4. c.No, investments in LLCs are never a security.

4 points

QUESTION 6

1. The default rule for board votes is...
2. a.One board seat, one vote.
3. b.One shareholder, one vote.
4. c.One share, one vote.