Question 1

When merger or consolidation is at issue, some states deny the right to vote and receive dividends to dissenting shareholders who exercise their appraisal rights.

Accepted Answer

A) True 
 B)False

Question 2

Who can enforce involuntary dissolution if gridlock over an issue persists among the directors?

Accepted Answer

A)   Officers
B)   SEC
C)   Shareholders
D)   A majority of the board of directors
E)   CourtsF) B) and C)
G) A) and E)

Question 3

[Battle for the Board] The Board of Directors of InfoHub, an internet service provider, contains 9 directors. Two of the directors, Jude and Rostan, decide they want to replace several of the directors with individuals who support their position and then take over the Board and control the company. Jude thinks it's a long shot, but Rostan tells him they could do it because Rostan has gradually been accumulating shares and they can get a majority of proxies on their side. Jude says the proxies are not important, because it's the shareholders that vote for the members of the board but it is difficult for them to find the names of shareholders. Rostan tells him not to worry, because he will get the shareholder list and focus only a few key shareholders, then get their proxies on his side before the next shareholder meeting.
-What type of takeover is contemplated in this situation?

Accepted Answer

A)   Beachhead offer
B)   Exchange tender offer.
C)   Cash tender offer.
D)   Beachhead acquisition.
E)   Takeover acquisition.F) D) and E)
G) A) and C)

Question 4

Britton Corporation and Sheridan Corporation combine to become a new corporation know as Brisher Corp. This process is known as ________.

Accepted Answer

A)   a merger
B)   a consolidation
C)   a combination
D)   an alteration
E)   a reorganizationF) A) and C)
G) B) and D)

Question 5

Federal regulations prohibit the management of target companies from using corporate funds to educate shareholders on the disadvantages of a takeover.

Accepted Answer

A) True 
 B)False

Question 6

[Cheeseland Purchase] Cheeseland, Inc., manufactures processed cheese products. BigCheese, Inc., seeks to purchase Cheeseland's well-known trademarks and logos, and its factory and equipment. The Board of Directors of both companies vote in favor of the deal. Alba is a 15% shareholder of Cheeseland. Her grandfather started the business many years ago and she does not want the company to sell off its endearing trademark and the factory her grandfather built. She visits Myron, an attorney, and Myron tells her that the Board's vote is legitimate to finalize the deal with BigCheese and the best she can do is take the money. Cyril is a shareholder in BigCheese, and his grandfather was cheated fifty years ago by Alba's grandfather and he doesn't want BigCheese to be responsible for Cheeseland's enormous liabilities. Cyril threatens to take BigCheese to court because he claims shareholder approval is required to purchase Cheeseland.
-What type of transaction is the deal contemplated by BigCheese and Cheeseland?

Accepted Answer

A)   Purchase of assets.
B)   Purchase of stock.
C)   Merger.
D)   Consolidation.
E)   Hostile Takeover.F) C) and D)
G) B) and D)

Question 7

[Gaming Merger] Calvin and Daniella each own 5% of GamePower, a video game design company. GamePower is seeking to merge with GameKing, and before a shareholder meeting, Calvin and Daniella email all other shareholders and corporate representatives about their disagreement with the proposed transaction. At the shareholder meeting, they vote against the merger with GameKing, but, 90% of the shareholders vote in favor of the merger. Calvin tells Daniella that it is not fair that they are forced to be part of GameKing. Daniella tells him they have no choice, so get used to it.
-Assuming Calvin and Daniella properly exercise their appraisal rights, how is the value of their shares generally determined?

Accepted Answer

A)   By the value of the shares on the day following the shareholder vote.
B)   By the value of the shares on the day of the shareholder vote.
C)   By the value of the shares on the day before the shareholder vote.
D)   By the value of the shares on the day the merger is finalized.
E)   By the value of the shares of similarly sized corporations.F) None of the above
G) B) and D)

Question 8

Which of the following is true regarding the type of intangible item that may constitute an asset?

Accepted Answer

A)   Goodwill, a company name, and a company logo all constitute types of intangible items that may constitute assets.
B)   Goodwill and a company name are types of intangible items that may constitute assets, but a company logo is not.
C)   Goodwill is a type of intangible item that may constitute an asset, but a company name and a company logo are not.
D)   A company name is a type of intangible item that may constitute an asset, but goodwill and a company logo are not.
E)   A company name and a company logo are types of intangible items that may constitute assets, but goodwill is not.F) None of the above
G) B) and D)

Question 9

What type of acquisition occurs when an aggressor gradually accumulates the target company's shares?

Accepted Answer

A)   Controlled acquisition
B)   Aggressor acquisition
C)   Belittled acquisition
D)   Beachhead acquisition
E)   Contemplated acquisitionF) A) and B)
G) A) and C)

Question 10

The aim of merger control statutes in ________ is not to discourage mergers but to ensure that the combination of businesses does not impede competition.

Accepted Answer

A)   China
B)   Switzerland
C)   England
D)   France
E)   CanadaF) B) and E)
G) All of the above

Question 11

Which of the following must a corporation do first when initiating voluntary dissolution procedures?

Accepted Answer

A)   The directors must file articles of dissolution with the secretary of state.
B)   The directors must notify the local court with jurisdiction over any claims.
C)   The officers must resign.
D)   The directors must resign.
E)   The court must appoint a receiver.F) None of the above
G) B) and C)

Question 12

To what does the term "going private" refer during a hostile takeover situation?

Accepted Answer

A)   A leveraged buyout
B)   A management buyout
C)   An approved buyout
D)   A corporate buyout
E)   A closely managed buyoutF) C) and E)
G) C) and D)

Question 13

If a merger increases the number of the surviving corporation's shares by no more than 20 percent, most states do not require ________.

Accepted Answer

A)   the approval of the surviving corporation's shareholders
B)   SEC approval.
C)   any paperwork to be filed with the state's Corporation Commission.
D)   that the surviving corporation pay taxes on the merger.
E)   property taxes to be paid for two years to allow the merged corporation to become established.F) C) and E)
G) B) and D)

Question 14

Ana is the president of PJL Corporation. In November, her assistant Damon tells her that B2B Corporation is planning a tender offer and that it has presented an offer to shareholders. Ana tells him that they should keep information regarding PJL Corporation as quiet as possible until the end of the year because she does not want shareholders to find out any negative information regarding PJL Corporation's poor performance in the last few months. Which of the following is true regarding Ana's plan?

Accepted Answer

A)   It is a good plan only if a close corporation is involved; otherwise, Ana has a duty to reveal all pertinent facts to shareholders.
B)   It is a good plan only if an S Corporation is involved; otherwise, Ana has a duty to reveal all pertinent facts to shareholders.
C)   It is a good plan only if the corporation is new, meaning that it has been incorporated under one year; otherwise, Ana has a duty to reveal all pertinent facts to shareholders.
D)   It is a bad plan because Ana must at least inform the shareholders that she is withholding information until the end of the year.
E)   It is a bad plan because once an aggressor has presented its offer to the target corporation's shareholders, the target corporation's board of directors must inform shareholders of all facts pertinent to voting.F) A) and B)
G) C) and D)

Question 15

In most states, which of the following is true regarding Tyler's concern that Sean could not be sued for the price of the skateboards?

Accepted Answer

A)   Sean cannot be sued if Sean purchased the skateboards within 30 days of the joining of the businesses.
B)   Sean can be sued only if Sean purchased the skateboards within 30 days of the joining of the businesses.
C)   Sean cannot be sued unless Sean approves in writing the joining of the businesses.
D)   Sean can be sued only if Sean is notified by certified letter of the joining of the businesses.
E)   The right to sue Sean would not be lost by the joining of the corporations.F) C) and D)
G) A) and C)

Question 16

Although an acquiring corporation can buy another corporation's voting shares, the acquiring corporation cannot buy all of another corporation's voting shares.

Accepted Answer

A) True 
 B)False

Question 17

When a corporation desires ________, both the shareholders and the board of director's approval must be obtained.

Accepted Answer

A)   to discuss internal business to the corporation
B)   to discuss a future merger
C)   to sell a majority of its assets
D)   to discuss a consolidation
E)   to discuss a potential takeoverF) B) and E)
G) A) and E)

Question 18

Under what circumstances may a court order an involuntary dissolution of a corporation?

Accepted Answer

A)   When the corporation has failed to show a profit for over two years, when the corporation obtained its article of incorporation fraudulently, when the directors have abused their power, and when the corporation is insolvent.
B)   When the corporation obtained its article of incorporation fraudulently, when the directors have abused their power, and when the corporation is insolvent.
C)   When the corporation has failed to show a profit for over two years, when the corporation obtained its article of incorporation fraudulently, and when the directors have abused their power.
D)   When the corporation has failed to show a profit for over two years, when the corporation obtained its article of incorporation fraudulently, and when the corporation is insolvent.
E)   Only when the corporation is insolvent.F) A) and C)
G) A) and B)

Question 19

Which of the following is false regarding the merger process in South Africa?

Accepted Answer

A)   Shareholders cannot approve a merger unless 50 percent of all shareholders vote to accept the offer.
B)   Minority shareholders have access to South African courts and may employ them when disputes arise.
C)   The Companies Act establishes a panel to inquire about mergers or takeovers.
D)   The Companies Act and the rules of the Johannesburg Stock Exchange control mergers.
E)   If a change of corporate control takes place outside the stock exchange, the initiator of the merger must extend the offer to the shareholders and disclose all pertinent information to them within a reasonable amount of time.F) A) and E)
G) A) and D)

Question 20

By offering to give shareholders in Grassroots Corporation stock in Grow True Corporation in return for shares of stock in Grassroots Corporation, Grow True Corporation made a[n] ________.

Accepted Answer

A)   Exchange offer
B)   Stock tender offer
C)   Hostile offer
D)   Illegal offer
E)   Control tender offerF) A) and E)
G) D) and E)

Exam 40: Corporations: Mergers, Consolidations, Terminations

When a corporation desires ________, both the shareholders and the board of director's approval must be obtained.

Correct Answer
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In most states, which of the following is true regarding Tyler's concern that Sean could not be sued for the price of the skateboards?

Correct Answer
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The aim of merger control statutes in ________ is not to discourage mergers but to ensure that the combination of businesses does not impede competition.

Correct Answer
verified

Which of the following is false regarding the merger process in South Africa?

Correct Answer
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Correct Answer
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Which of the following must a corporation do first when initiating voluntary dissolution procedures?

Correct Answer
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Correct Answer
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If a merger increases the number of the surviving corporation's shares by no more than 20 percent, most states do not require ________.

Correct Answer
verified

When merger or consolidation is at issue, some states deny the right to vote and receive dividends to dissenting shareholders who exercise their appraisal rights.

Correct Answer
verified

By offering to give shareholders in Grassroots Corporation stock in Grow True Corporation in return for shares of stock in Grassroots Corporation, Grow True Corporation made a[n] ________.

Correct Answer
verified

Although an acquiring corporation can buy another corporation's voting shares, the acquiring corporation cannot buy all of another corporation's voting shares.

Correct Answer
verified

Who can enforce involuntary dissolution if gridlock over an issue persists among the directors?

Correct Answer
verified

Which of the following is true regarding the type of intangible item that may constitute an asset?

Correct Answer
verified

Correct Answer
verified

Under what circumstances may a court order an involuntary dissolution of a corporation?

Correct Answer
verified

Federal regulations prohibit the management of target companies from using corporate funds to educate shareholders on the disadvantages of a takeover.

Correct Answer
verified

Britton Corporation and Sheridan Corporation combine to become a new corporation know as Brisher Corp. This process is known as ________.

Correct Answer
verified

To what does the term "going private" refer during a hostile takeover situation?

Correct Answer
verified

What type of acquisition occurs when an aggressor gradually accumulates the target company's shares?

Correct Answer
verified

Correct Answer
verified

Exam 40: Corporations: Mergers, Consolidations, Terminations

When a corporation desires ________, both the shareholders and the board of director's approval must be obtained.

Correct AnswerverifiedShow Answer

In most states, which of the following is true regarding Tyler's concern that Sean could not be sued for the price of the skateboards?

Correct AnswerverifiedShow Answer

The aim of merger control statutes in ________ is not to discourage mergers but to ensure that the combination of businesses does not impede competition.

Correct AnswerverifiedShow Answer

Which of the following is false regarding the merger process in South Africa?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following must a corporation do first when initiating voluntary dissolution procedures?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If a merger increases the number of the surviving corporation's shares by no more than 20 percent, most states do not require ________.

Correct AnswerverifiedShow Answer

When merger or consolidation is at issue, some states deny the right to vote and receive dividends to dissenting shareholders who exercise their appraisal rights.

Correct AnswerverifiedShow Answer

By offering to give shareholders in Grassroots Corporation stock in Grow True Corporation in return for shares of stock in Grassroots Corporation, Grow True Corporation made a[n] ________.

Correct AnswerverifiedShow Answer

Although an acquiring corporation can buy another corporation's voting shares, the acquiring corporation cannot buy all of another corporation's voting shares.

Correct AnswerverifiedShow Answer

Who can enforce involuntary dissolution if gridlock over an issue persists among the directors?

Correct AnswerverifiedShow Answer

Which of the following is true regarding the type of intangible item that may constitute an asset?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Under what circumstances may a court order an involuntary dissolution of a corporation?

Correct AnswerverifiedShow Answer

Federal regulations prohibit the management of target companies from using corporate funds to educate shareholders on the disadvantages of a takeover.

Correct AnswerverifiedShow Answer

Britton Corporation and Sheridan Corporation combine to become a new corporation know as Brisher Corp. This process is known as ________.

Correct AnswerverifiedShow Answer

To what does the term "going private" refer during a hostile takeover situation?

Correct AnswerverifiedShow Answer

What type of acquisition occurs when an aggressor gradually accumulates the target company's shares?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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