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MMLU-Pro / 1099 / Rainbow Corporation has outstanding 1,000 shares of voting common stock and…

Problem

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question

Rainbow Corporation has outstanding 1,000 shares of voting common stock and 1,000 shares of nonvoting preferred. The preferred has a liquidation preference equal to its par value of $100 per share plus a 3 percent noncumulative dividend. Rainbow submits to its stockholders a proposal to authorize a new class of preferred stock with redemption rights that would come ahead of the old preferred stock. At a shareholders' meeting, 700 common and 400 preferred vote in favor of the proposal. Which of the following statements is correct?

category

law

options

  1. The proposal is invalidly approved because a unanimous vote from both classes is required.
  2. The proposal is validly approved because the nonvoting preferred stock does not count towards the vote.
  3. The proposal is invalidly approved because a two-thirds vote of each class is required.
  4. The vote of the preferred stockholders does not matter because it was nonvoting stock.
  5. The proposal is validly approved because the common shareholders have the majority vote.
  6. The vote of the preferred stockholders does not matter because the proposal affects the common stock.
  7. The proposal is validly approved because the preferred stockholders who voted in favor have a liquidation preference.
  8. The proposal is invalidly approved because a majority of the outstanding shares did not approve.
  9. The proposal is invalidly approved because a majority of the preferred shareholders did not approve.
  10. The proposal is validly approved because overall a majority of the outstanding shares did approve.

src

ori_mmlu-professional_law

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Source and history

upstream_id / Original problem ID
1099
task_id
1cd1f3bf-d336-5478-adc0-cbfdbb38cfab
task_key
default--test--1099
task_revision_id
1
config / split
default / test

Official source

initial import