Question 1

A merger or consolidation plan must be approved by the boards of directors of all involved corporations.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following was a finding of the court in Shiftan v.Morgan Joseph Holdings Inc. ,the case in the text involving stock appraisal rights following a merger?

Accepted Answer

A)  That the doctrine of contra proferentem,meaning that contracts are construed in accordance with standard criteria for contract interpretation,is applied when interpreting certificates of incorporation.
B)  That an appraisal proceeding takes into account and considers any relevant element of value arising from the accomplishment or expectation of a merger or consolidation.
C)  That standard rules of contract interpretation do not apply to the interpretation of certificates of incorporation.
D)  That parol evidence,while often available,is inadmissible when interpreting certificates of incorporation.
E)  That in valuing the stock at issue,the fact that the stock would have been entitled to a mandatory redemption a few months after the merger was irrelevant.F) A) and B)
G) A) and C)

Question 3

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 4

Stacia,a shareholder in ZipCorp,learns that ZipCorp's Board of Directors have voted for ZipCorp to merge with ZenCorp.Stacia objects to the merger because the shareholders did not vote to approve the merger.Under which of the following scenarios would a shareholder,like Stacia,not have a right to vote for a merger?

Accepted Answer

A)  If ZenCorp owns at least 90% of the outstanding shares of ZipCorp stock.
B)  If the FCC approved ZenCorp's plan.
C)  If ZenCorp owned at least three-fifths of ZipCorp's stock.
D)  If ZenCorp were a foreign corporation.
E)  If ZipCorp were a foreign corporation.F) None of the above
G) A) and B)

Question 5

When a corporation desires to sell a majority of its assets,which of the following must it obtain?

Accepted Answer

A)  Approval from shareholders,but not from officers or its board of directors.
B)  Approval from officers,its board of directors,and shareholders.
C)  Approval from its board of directors and shareholders,but not from officers.
D)  Approval from its board of directors,but not from shareholders or officers.
E)  Approval from officers and its board of directors,but not from shareholders.F) A) and D)
G) A) and E)

Question 6

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

Accepted Answer

A)  The Companies Act establishes a panel to inquire about mergers or takeovers.
B)  Shareholders cannot approve a merger unless 50 percent of all shareholders vote to accept the offer.
C)  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.
D)  Minority shareholders have access to South African courts and may employ them when disputes arise.
E)  The Companies Act and the rules of the Johannesburg Stock Exchange control mergers.F) B) and E)
G) A) and E)

Question 7

[Skateboard Growth] Both Tyler and Byron were presidents of small corporations involved with manufacturing and selling skateboards.Tyler's store was called "Thrasher Skateboard" and Byron's business was called "Skateboard for Health." Because a large sports store was coming into town,they,along with the boards of directors of the two companies and all shareholders,decided that it would be a good idea to combine the businesses.They decided to retain the name "Skateboard for Health." However,Tyler was concerned with the change because,on behalf of his company,he was contemplating filing a lawsuit against Sean who had purchased 10 custom skateboards and had not paid for them.He was excited,however,about the prospect of not being liable for a lawsuit he expects to be filed by Alec who fell and sustained a serious ankle sprain and medical bills when a wheel came off of a skateboard sold by Tyler's corporation.After investigation,Tyler is aware that the wheel was negligently attached to the skateboard.Tyler told Byron that one reason he wanted to retain Byron's name was to prevent Alec from being able to recover against him.
-Which of the following is the appropriate term for the action contemplated by Tyler and Byron to combine the businesses under the name "Skateboard for Health"?

Accepted Answer

A)  Merger
B)  Consolidation
C)  Restructuring
D)  Reforming
E)  Asset purchaseF) A) and E)
G) B) and C)

Question 8

Which of the following types of mergers does not require shareholder approval?

Accepted Answer

A)  Access mergers
B)  Short-form mergers
C)  Required mergers
D)  Specific mergers
E)  Short-term mergersF) B) and E)
G) A) and D)

Question 9

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

Question 10

Two security services,A-to-Z Security and Secure-Safe Security,propose to merge.Each corporation has fewer than 10 shareholders.The proposed merger receives majority shareholder approval.Roberto,a minority shareholder who owns 10% of the stock in Secure-Safe Security,however,is very much opposed to the merger.He tells the other Secure-Safe shareholders that unless they convince him otherwise,he will block the merger.What are Roberto'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 11

When a group within a corporation,usually management,buys all outstanding corporate stock held by the public,it is called:

Accepted Answer

A)  An illegal buyout
B)  An asset purchase
C)  A corporate buyout
D)  A management buyout
E)  A leveraged buyoutF) A) and B)
G) A) and E)

Question 12

Is Cyril correct that BigCheese will be responsible for Cheeseland's liabilities?

Accepted Answer

A)  Yes,unless the contract between BigCheese and Cheeseland states otherwise.
B)  Yes,like a merger or consolidation,corporations that purchase the assets of another corporation generally acquire its liabilities.
C)  Yes,because asset purchases are treated like a merger.
D)  No,the liabilities of one corporation do not transfer to the other unless there is an express agreement otherwise.
E)  No,corporations that purchase the assets of another corporation generally do not acquire its liabilities.F) B) and C)
G) A) and B)

Question 13

When dissenting shareholders do not properly invoke their appraisal rights,will they be forced to comply with the majority of the corporations' shareholders?

Accepted Answer

A)  Yes,in such a situation,dissenting shareholders must comply with the decision of the majority of the corporations' shareholders.
B)  No,dissenting shareholders need not comply as long as they adequately communicate their appraisal rights.
C)  No,dissenting shareholders need not comply because the procedures governing appraisal rights need not be strictly followed.
D)  No,dissenting shareholders are never forced to comply with the decision of the majority of the corporations' shareholders.
E)  Yes,although the dissenting shareholders cannot exercise their appraisal rights if not properly invoked,a court will not force them to comply with the decision of the majority of the corporations' shareholdersF) A) and C)
G) B) and C)

Question 14

A legal contract that combines two or more corporations such that only one of the corporations continues to exist is referred to as which of the following?

Accepted Answer

A)  A reorganization
B)  A combination
C)  An alteration
D)  A merger
E)  A consolidationF) B) and C)
G) A) and E)

Question 15

Which of the following statements is false about involuntary dissolution in the case of gridlock among the directors?

Accepted Answer

A)  Courts can enforce involuntary dissolution if gridlock over an issue persists
B)  Before ordering dissolution,courts usually urge shareholders to attempt to resolve their differences.
C)  Courts will force shareholders to resolve the differences among the directors.
D)  Courts will consider the extent to which deadlock will result in irreversible damage to the corporation.
E)  If the disagreement will likely cause significant damage to the corporation,courts will order the corporation to be dissolved.F) All of the above
G) B) and C)

Question 16

In a consolidation,which of the following is true regarding the property of the original corporations?

Accepted Answer

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

Question 17

When involuntary dissolution occurs,courts automatically appoint a receiver.

Accepted Answer

A) True 
 B)False

Question 18

Target corporations are not required by federal securities law to assist aggressors in any way.

Accepted Answer

A) True 
 B)False

Question 19

Under which of the following circumstances would a court likely not enforce involuntary dissolution of a corporation.

Accepted Answer

A)  Gridlock over an issue persists among the directors.
B)  The corporation is insolvent.
C)  The directors abused their power.
D)  The articles of incorporation were forged.
E)  Failure to pay taxes within forty-five days of the due date.F) A) and D)
G) All of the above

Question 20

Which of the following is true regarding liquidation?

Accepted Answer

A)  It begins immediately prior to dissolution.
B)  It is the process by which the board converts the corporation's assets into cash and distributes them among the corporation's creditors and shareholders.
C)  Liquidation duties fall upon officers of the corporation.
D)  Liquidation is another name for dissolution.
E)  It is the process by which the board provides notice to the secretary of state that the corporation will no longer remain in existence.F) All of the above
G) B) and C)

Exam 40: Corporations: Mergers, consolidations, terminations

Which of the following statements is false about involuntary dissolution in the case of gridlock among the directors?

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

A merger or consolidation plan must be approved by the boards of directors of all involved corporations.

Correct Answer
verified

Which of the following was a finding of the court in Shiftan v.Morgan Joseph Holdings Inc. ,the case in the text involving stock appraisal rights following a merger?

Correct Answer
verified

Correct Answer
verified

Target corporations are not required by federal securities law to assist aggressors in any way.

Correct Answer
verified

When involuntary dissolution occurs,courts automatically appoint a receiver.

Correct Answer
verified

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

A legal contract that combines two or more corporations such that only one of the corporations continues to exist is referred to as which of the following?

Correct Answer
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Correct Answer
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Is Cyril correct that BigCheese will be responsible for Cheeseland's liabilities?

Correct Answer
verified

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

Correct Answer
verified

When dissenting shareholders do not properly invoke their appraisal rights,will they be forced to comply with the majority of the corporations' shareholders?

Correct Answer
verified

In a consolidation,which of the following is true regarding the property of the original corporations?

Correct Answer
verified

Which of the following types of mergers does not require shareholder approval?

Correct Answer
verified

Under which of the following circumstances would a court likely not enforce involuntary dissolution of a corporation.

Correct Answer
verified

Which of the following is true regarding liquidation?

Correct Answer
verified

When a group within a corporation,usually management,buys all outstanding corporate stock held by the public,it is called:

Correct Answer
verified

When a corporation desires to sell a majority of its assets,which of the following must it obtain?

Correct Answer
verified

Exam 40: Corporations: Mergers, consolidations, terminations

Which of the following statements is false about involuntary dissolution in the case of gridlock among the directors?

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

A merger or consolidation plan must be approved by the boards of directors of all involved corporations.

Correct AnswerverifiedShow Answer

Which of the following was a finding of the court in Shiftan v.Morgan Joseph Holdings Inc. ,the case in the text involving stock appraisal rights following a merger?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Target corporations are not required by federal securities law to assist aggressors in any way.

Correct AnswerverifiedShow Answer

When involuntary dissolution occurs,courts automatically appoint a receiver.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

A legal contract that combines two or more corporations such that only one of the corporations continues to exist is referred to as which of the following?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Is Cyril correct that BigCheese will be responsible for Cheeseland's liabilities?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When dissenting shareholders do not properly invoke their appraisal rights,will they be forced to comply with the majority of the corporations' shareholders?

Correct AnswerverifiedShow Answer

In a consolidation,which of the following is true regarding the property of the original corporations?

Correct AnswerverifiedShow Answer

Which of the following types of mergers does not require shareholder approval?

Correct AnswerverifiedShow Answer

Under which of the following circumstances would a court likely not enforce involuntary dissolution of a corporation.

Correct AnswerverifiedShow Answer

Which of the following is true regarding liquidation?

Correct AnswerverifiedShow Answer

When a group within a corporation,usually management,buys all outstanding corporate stock held by the public,it is called:

Correct AnswerverifiedShow Answer

When a corporation desires to sell a majority of its assets,which of the following must it obtain?

Correct AnswerverifiedShow Answer

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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