Question 1

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  False

Question 2

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

Accepted Answer

A)   5
B)   10
C)   15
D)   20
E)   30F) A) and C)
G) C) and D) D

Question 3

Which of the following describes a plan set up by ABC Company whereby its other shareholders may purchase shares of ABC stock at a significantly reduced price if any individual or entity obtains a majority of ABC Company's stock?

Accepted Answer

A)   Protection method
B)   Beachhead defense
C)   Poison pill
D)   Exchange offer
E)   Chose in actionF) C) and D)
G) A) and E)

Question 4

In a merger situation,which of the following is a term for the corporation that does not continue to exist?

Accepted Answer

A)   The declined corporation
B)   The removed corporation
C)   The absorbed corporation
D)   The concealed corporation
E)   The deceased corporationF) A) and D)
G) C) and E)

Question 5

In a consolidation,what happens to the property of the original corporations?

Accepted Answer

A)   It must be sold and distributed to the respective shareholders.
B)   It must be held in trust for at least one year to satisfy claims of creditors.
C)   It must be held in trust for at least six months to satisfy claims of creditors.
D)   It must be placed within the jurisdiction of the secretary of state for at least one year in order to satisfy claims of creditors.
E)   None of these.F) C) and D)
G) A) and B)

Question 6

Which of the following results in a chose in action?

Accepted Answer

A)   The surviving corporation's right to sue Hank for amounts owed.
B)   The right of Greg to sue the surviving corporation for damages.
C)   The right of Bernie to a golden parachute if he is terminated after the joining.
D)   The right of John to fire Bernie after the merger.
E)   The right of shareholders to dissent from the joining of the corporations for 30 days following.F) B) and D)
G) All of the above A

Question 7

Which of the following occurs when an aggressor gradually accumulates the target company's shares?

Accepted Answer

A)   Controlled acquisition
B)   Timed acquisition
C)   Gradual acquisition
D)   Beachhead acquisition
E)   Pirate acquisitionF) C) and E)
G) B) and D)

Question 8

What key piece of information does an aggressor generally need in order to gain control of a target corporation through proxies?

Accepted Answer

A)   A list of target shareholders
B)   A list of target officers
C)   A list of members of the board of directors of the target
D)   The income statements of the target
E)   The balance sheet of the targetF) C) and E)
G) A) and D)

Question 9

In a consolidation,shareholders of the new corporation create new articles of incorporation called ____.

Accepted Answer

A)   Revised articles of incorporation
B)   Merged articles of incorporation
C)   Articles of consolidation
D)   Revised articles of consolidation
E)   Independent articles of combinationF) A) and B)
G) A) and C)

Question 10

Death of a corporation occurs in which of the following phases?

Accepted Answer

A)   Dissolution and trial
B)   Dissolution and proceedings
C)   Dissolution and liquidation
D)   Reforming and liquidation
E)   Notification and liquidationF) A) and E)
G) A) and D)

Question 11

Which of the following was the result on appeal in Royal Crown Companies Inc.,v.McMahon,the case in the text in which the former president of a subsidiary of Royal Crown sued claiming that an agreement regarding severance pay was breached?

Accepted Answer

A)   The court ruled that a golden parachute contract is void as against public policy and, therefore, unenforceable.
B)   The court ruled that a severance agreement, regardless of whether it is considered a golden parachute contract, is contrary to the employment at will principle and, therefore, unenforceable.
C)   The court ruled that while severance agreements approved by a majority of shareholders are valid, the severance agreement in the case was not so approved and was, therefore, invalid.
D)   The court ruled that the agreement would be enforced but only because it was not considered a golden parachute contract.
E)   The court ruled that the severance agreement was valid and enforceable and that it made no difference that it was considered a golden parachute agreement.F) B) and E)
G) All of the above

Question 12

In which of the following are two or more corporations combined with neither of the original corporations continuing to exist legally?

Accepted Answer

A)   A merger
B)   A consolidation
C)   A combination
D)   An alteration
E)   A reorganizationF) None of the above
G) B) and D)

Question 13

Which of the following is the proper term for the plan to discontinue Reuse It?

Accepted Answer

A)   Voluntary corporate discontinuance
B)   Involuntary corporate discontinuance
C)   Voluntary relinquishment
D)   Voluntary dissolution
E)   Involuntary dissolutionF) D) and E)
G) A) and C)

Question 14

Which of the following is true regarding Bernie's belief that Greg will be unable to collect anything for the accident after the joining of the businesses?

Accepted Answer

A)   Bernie is correct that Greg will be unable to win in litigation against him so long as the joining is completed before Greg files the lawsuit.
B)   Bernie is correct that Greg will be unable to win in litigation against him regardless of whether the lawsuit is filed before or after the joining so long as no judgment is entered prior to the joining.
C)   Bernie is correct that Greg will be unable to sue him unless Greg files in court an objection to the joining and prevails.
D)   Bernie is correct that Greg will be unable to win in litigation against him unless Greg can establish fraud in connection with the joining.
E)   Bernie is incorrect, and the joining will have no effect on the lawsuit.F) B) and E)
G) B) and C)

Question 15

In a merger situation,which of the following is a term for the remaining corporation?

Accepted Answer

A)   The resulting corporation
B)   The winning corporation
C)   The approved corporation
D)   The surviving corporation
E)   The remaining corporationF) A) and E)
G) B) and D)

Question 16

The surviving corporation's right to sue for debt and damages on behalf of the absorbed corporation is called which of the following?

Accepted Answer

A)   A right of recovery
B)   A right of litigation
C)   A course of recovery
D)   A chose in action
E)   An accord and satisfactionF) B) and D)
G) B) and E)

Question 17

Asset purchases are similar to mergers and consolidations because a corporation that purchases the assets of another corporation generally acquires its liabilities.

Accepted Answer

A) True 
 B)False

Question 18

Two security services,ABC Security and R.Knight Security,propose to merge.Each corporation has fewer than 10 shareholders.The proposed merger receives majority shareholder approval.Richard,a minority shareholder who owns 10% of the stock in Knight Security,however,is very much opposed to the merger.He tells the other shareholders in Knight Security that unless they convince him otherwise,he will block the merger.What are Richard's rights as a dissenting shareholder,and does he have the power to block the merger?

Accepted Answer

A dissenting shareholder does not have t...

Question 19

Which of the following is true of Barbara's plan to continue with disbanding the corporation over Willy's objection?

Accepted Answer

A)   She could not continue with her plan because unanimous approval of shareholders was required.
B)   She could proceed with her plan.
C)   It is unknown if she could proceed with her plan because Willy's agreement was essential if he owned more than 30% of the company's shares.
D)   It is unknown if she could proceed with her plan because Willy's agreement was essential if he owned more than 20% of the company's shares.
E)   It is unknown if she could proceed with her plan because Willy's agreement was essential if he owned more than 10% of the company's shares.F) B) and E)
G) B) and C)

Question 20

Which of the following is true regarding state approval of mergers?

Accepted Answer

A)   There is no requirement that the state approve mergers.
B)   After reviewing the plan to see that legal requirements are met, the secretary of state issues a certificate to grant approval.
C)   The secretary of state must approve mergers so long as corporate entity at issue has sufficient assets.
D)   The secretary of state must approve mergers so long as creditors of the corporate entity at issue do not remain unpaid.
E)   The secretary of state must approve mergers so long as no more than 10% of either company's shareholders object.F) B) and C)
G) B) and E)

Exam 40: Corporations: Mergers, Consolidations, and Termination

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

Correct Answer
verified
False

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

Correct Answer
verified
D

Which of the following describes a plan set up by ABC Company whereby its other shareholders may purchase shares of ABC stock at a significantly reduced price if any individual or entity obtains a majority of ABC Company's stock?

Correct Answer
verified

In a merger situation,which of the following is a term for the corporation that does not continue to exist?

Correct Answer
verified

In a consolidation,what happens to the property of the original corporations?

Correct Answer
verified

Which of the following results in a chose in action?

Correct Answer
verified
A

Which of the following occurs when an aggressor gradually accumulates the target company's shares?

Correct Answer
verified

What key piece of information does an aggressor generally need in order to gain control of a target corporation through proxies?

Correct Answer
verified

In a consolidation,shareholders of the new corporation create new articles of incorporation called ____.

Correct Answer
verified

Death of a corporation occurs in which of the following phases?

Correct Answer
verified

Which of the following was the result on appeal in Royal Crown Companies Inc.,v.McMahon,the case in the text in which the former president of a subsidiary of Royal Crown sued claiming that an agreement regarding severance pay was breached?

Correct Answer
verified

In which of the following are two or more corporations combined with neither of the original corporations continuing to exist legally?

Correct Answer
verified

Which of the following is the proper term for the plan to discontinue Reuse It?

Correct Answer
verified

Which of the following is true regarding Bernie's belief that Greg will be unable to collect anything for the accident after the joining of the businesses?

Correct Answer
verified

In a merger situation,which of the following is a term for the remaining corporation?

Correct Answer
verified

The surviving corporation's right to sue for debt and damages on behalf of the absorbed corporation is called which of the following?

Correct Answer
verified

Asset purchases are similar to mergers and consolidations because a corporation that purchases the assets of another corporation generally acquires its liabilities.

Correct Answer
verified

Correct Answer
verified
A dissenting shareholder does not have t...
View Answer

Which of the following is true of Barbara's plan to continue with disbanding the corporation over Willy's objection?

Correct Answer
verified

Which of the following is true regarding state approval of mergers?

Correct Answer
verified

Exam 40: Corporations: Mergers, Consolidations, and Termination

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

Correct AnswerverifiedFalse

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

Correct AnswerverifiedD

Which of the following describes a plan set up by ABC Company whereby its other shareholders may purchase shares of ABC stock at a significantly reduced price if any individual or entity obtains a majority of ABC Company's stock?

Correct AnswerverifiedShow Answer

In a merger situation,which of the following is a term for the corporation that does not continue to exist?

Correct AnswerverifiedShow Answer

In a consolidation,what happens to the property of the original corporations?

Correct AnswerverifiedShow Answer

Which of the following results in a chose in action?

Correct AnswerverifiedA

Which of the following occurs when an aggressor gradually accumulates the target company's shares?

Correct AnswerverifiedShow Answer

What key piece of information does an aggressor generally need in order to gain control of a target corporation through proxies?

Correct AnswerverifiedShow Answer

In a consolidation,shareholders of the new corporation create new articles of incorporation called ____.

Correct AnswerverifiedShow Answer

Death of a corporation occurs in which of the following phases?

Correct AnswerverifiedShow Answer

Which of the following was the result on appeal in Royal Crown Companies Inc.,v.McMahon,the case in the text in which the former president of a subsidiary of Royal Crown sued claiming that an agreement regarding severance pay was breached?

Correct AnswerverifiedShow Answer

In which of the following are two or more corporations combined with neither of the original corporations continuing to exist legally?

Correct AnswerverifiedShow Answer

Which of the following is the proper term for the plan to discontinue Reuse It?

Correct AnswerverifiedShow Answer

Which of the following is true regarding Bernie's belief that Greg will be unable to collect anything for the accident after the joining of the businesses?

Correct AnswerverifiedShow Answer

In a merger situation,which of the following is a term for the remaining corporation?

Correct AnswerverifiedShow Answer

The surviving corporation's right to sue for debt and damages on behalf of the absorbed corporation is called which of the following?

Correct AnswerverifiedShow Answer

Asset purchases are similar to mergers and consolidations because a corporation that purchases the assets of another corporation generally acquires its liabilities.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedA dissenting shareholder does not have t...View AnswerShow Answer

Which of the following is true of Barbara's plan to continue with disbanding the corporation over Willy's objection?

Correct AnswerverifiedShow Answer

Which of the following is true regarding state approval of mergers?

Correct AnswerverifiedShow Answer

Correct Answer
verified
False

Correct Answer
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D

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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A

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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A dissenting shareholder does not have t...
View Answer

Correct Answer
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Correct Answer
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