Question 1

Generally, a corporation that acquires any assets of another corporation needs to obtain shareholder approval for the purchase.

Accepted Answer

A) True 
 B)False

Question 2

Quantum Company exchanges some of its shares for some of the shares of Rocket Corporation. The exchange is used to create Space Inc., whose business activity is to hold the shares of the two companies. Space Inc. is

Accepted Answer

A)   a holding company.
B)   a parent corporation.
C)   a subsidiary corporation.
D)   a foreign corporation.E) None of the above
F) All of the above

Question 3

Lender Inc. owns all of the shares of Mortgage Inc. Lender Inc. is

Accepted Answer

A)   a holding company.
B)   a parent corporation.
C)   a subsidiary corporation.
D)   all of the choices.E) A) and C)
F) B) and C)

Question 4

Business Inc. acquires all of the assets of Commerce Inc. by direct purchase. Dona is a Commerce shareholder who does not approve of the deal. In most states, Dona can

Accepted Answer

A)   reverse the deal so Commerce acquires all of the assets of Business.
B)   insist that the companies carry out their corporate purposes.
C)   demand appraisal rights.
D)   require the parties to cancel the deal.E) B) and D)
F) A) and C)

Question 5

A short-form merger is the acquisition of control over a corporation through a purchase of stock.

Accepted Answer

A) True 
 B)False

Question 6

Lunch Trucks Inc. owns more than 90 percent of the shares of Kitchens Company. A plan for a merger of Lunch Trucks and Kitchens must be approved by the shareholders of

Accepted Answer

A)   both corporations.
B)   Lunch Trucks only.
C)   Kitchens only.
D)   neither corporation.E) B) and C)
F) A) and C)

Question 7

The business judgment rule may apply to determine whether directors acted reasonably in resisting a takeover attempt.

Accepted Answer

A) True 
 B)False

Question 8

Code Company combines its assets and liabilities with those of Design Corporation to form Engineer Inc. Code and Design cease to exist. With respect to the assets of Code and Design, Engineer Inc. acquires

Accepted Answer

A)   none.
B)   only those acquired after the combination was proposed.
C)   an amount equal to the ratio of the firms' pre-merger market values.
D)   all.E) B) and D)
F) None of the above

Question 9

A shareholder may not petition a court for corporate dissolution.

Accepted Answer

A) True 
 B)False

Question 10

The shareholder's appraisal right does not normally apply to sales of substantially all of the corporate assets.

Accepted Answer

A) True 
 B)False

Question 11

Through a certain transaction, Café Inc. acquires all of the shares of Diner Corporation for some of Café's shares. Both Café and Diner continue to exist. This is

Accepted Answer

A)   a consolidation.
B)   a share exchange.
C)   a short-form merger.
D)   a purchase of assets.E) A) and B)
F) All of the above

Question 12

An appraisal right is available only when a federal statute specifically provides for it.

Accepted Answer

A) True 
 B)False

Exam 35: Corporate Mergers, Takeovers, and Termination

Lunch Trucks Inc. owns more than 90 percent of the shares of Kitchens Company. A plan for a merger of Lunch Trucks and Kitchens must be approved by the shareholders of

Correct Answer
verified

Lender Inc. owns all of the shares of Mortgage Inc. Lender Inc. is

Correct Answer
verified

Business Inc. acquires all of the assets of Commerce Inc. by direct purchase. Dona is a Commerce shareholder who does not approve of the deal. In most states, Dona can

Correct Answer
verified

A shareholder may not petition a court for corporate dissolution.

Correct Answer
verified

An appraisal right is available only when a federal statute specifically provides for it.

Correct Answer
verified

A short-form merger is the acquisition of control over a corporation through a purchase of stock.

Correct Answer
verified

The shareholder's appraisal right does not normally apply to sales of substantially all of the corporate assets.

Correct Answer
verified

Generally, a corporation that acquires any assets of another corporation needs to obtain shareholder approval for the purchase.

Correct Answer
verified

The business judgment rule may apply to determine whether directors acted reasonably in resisting a takeover attempt.

Correct Answer
verified

Code Company combines its assets and liabilities with those of Design Corporation to form Engineer Inc. Code and Design cease to exist. With respect to the assets of Code and Design, Engineer Inc. acquires

Correct Answer
verified

Quantum Company exchanges some of its shares for some of the shares of Rocket Corporation. The exchange is used to create Space Inc., whose business activity is to hold the shares of the two companies. Space Inc. is

Correct Answer
verified

Through a certain transaction, Café Inc. acquires all of the shares of Diner Corporation for some of Café's shares. Both Café and Diner continue to exist. This is

Correct Answer
verified

Exam 35: Corporate Mergers, Takeovers, and Termination

Lunch Trucks Inc. owns more than 90 percent of the shares of Kitchens Company. A plan for a merger of Lunch Trucks and Kitchens must be approved by the shareholders of

Correct AnswerverifiedShow Answer

Lender Inc. owns all of the shares of Mortgage Inc. Lender Inc. is

Correct AnswerverifiedShow Answer

Business Inc. acquires all of the assets of Commerce Inc. by direct purchase. Dona is a Commerce shareholder who does not approve of the deal. In most states, Dona can

Correct AnswerverifiedShow Answer

A shareholder may not petition a court for corporate dissolution.

Correct AnswerverifiedShow Answer

An appraisal right is available only when a federal statute specifically provides for it.

Correct AnswerverifiedShow Answer

A short-form merger is the acquisition of control over a corporation through a purchase of stock.

Correct AnswerverifiedShow Answer

The shareholder's appraisal right does not normally apply to sales of substantially all of the corporate assets.

Correct AnswerverifiedShow Answer

Generally, a corporation that acquires any assets of another corporation needs to obtain shareholder approval for the purchase.

Correct AnswerverifiedShow Answer

The business judgment rule may apply to determine whether directors acted reasonably in resisting a takeover attempt.

Correct AnswerverifiedShow Answer

Code Company combines its assets and liabilities with those of Design Corporation to form Engineer Inc. Code and Design cease to exist. With respect to the assets of Code and Design, Engineer Inc. acquires

Correct AnswerverifiedShow Answer

Quantum Company exchanges some of its shares for some of the shares of Rocket Corporation. The exchange is used to create Space Inc., whose business activity is to hold the shares of the two companies. Space Inc. is

Correct AnswerverifiedShow Answer

Through a certain transaction, Café Inc. acquires all of the shares of Diner Corporation for some of Café's shares. Both Café and Diner continue to exist. This is

Correct AnswerverifiedShow Answer

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verified

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