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Exam 38: Mergers and Takeovers

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Question 31

True/False

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A merger will not affect the rights and liabilities of the corporations involved.

A) True
B) False

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Question 32

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Before a vote is taken on a proposed combination, the shareholders must be given sufficient information to evaluate the deal.

A) True
B) False

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Question 33

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

Bus Corporation exchanges some of its shares for some of the shares of Car Company. The exchange is used to create Drive Inc., whose business activity is to hold the shares of the two companies. Once the formalities are satisfied, a certificate of the exchange is issued by

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

A share exchange can be used to create a holding company.

When dissolution takes place by voluntary action, the members of the board of directors act as trustees of the corporate assets.

No state allows the combination of domestic and foreign corporations.

A short-form merger can be accomplished only with the approval of the shareholders .

Salmon Company decides to combine its operations with Tuna Corporation to form United Seafood Inc. Salmon and Tuna are domestic corporations. The plan for Salmon and Tuna's combination must be approved by the shareholders of

Apps Inc. decides to combine its operations with Beta Company to form Computer Software Inc. Apps and Beta are domestic corporations. Before a vote is taken on the proposed combination, sufficient information to evaluate the deal must be given to each corporation's

Rice Inc. seeks to purchase a substantial number of the voting shares of Sushi Company. The directors of Sushi resist Rice's takeover attempt. In analyzing whether this is reasonable, a court would apply

Appraisal rights do not normally apply to short-form mergers.

Revenue Inc. owns more than 90 percent of the shares of Sales Corporation. A copy of a plan for a merger of Revenue and Sales must be sent to each shareholder of

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

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

Dissolution of a corporation can be brought about by

Kudos Corporation combines its assets and liabilities with those of Livestream Company to form MedOnline Inc. Kudos and Livestream cease to exist. The agreement between Kudos and Livestream that sets out the capital structure and other features of MedOnline

The sale and distribution of the assets of a business on its termination is

Afton wants to go into business as Boom! to make and market fireworks. When deciding which form of business organization would be most appropriate, Afton would normally take into account all of the following except