Question 1

[Corporate Death] Janelle is president and a large shareholder in RecyCALL,a corporation that sells used cellular telephones.Although the company was not insolvent,sales had been significantly down,and Janelle decided that it would be a good idea to discontinue the business.The board of directors agreed with her.The board members presented the proposal to discontinue the corporation to shareholders.Initially,Ahmed,a disgruntled shareholder,opposed ending the corporation.He claimed that the problem was that Janelle had done a poor job in management.Janelle planned to go forward with the termination of the company because a majority of the shareholders agreed.Ahmed,however,came around;and upon a second vote to discontinue the corporation,the vote was unanimous.Tony,a vice president of the corporation,was aware of a few outstanding debts owed by RecyCALL.He suggested hurrying along quietly with ending the corporation because any claims not made before the corporation was dissolved could be avoided.Janelle told him that she was not sure that was a good idea.Therefore,the company proceeded with all appropriate notifications.When the time came to liquidate the corporation,the members of the board did not want to participate.Janelle was concerned about what action to take at that point because she really wanted to be finished with RecyCALL.
-Which of the following is the proper term for the plan to discontinue RecyCALL?

Accepted Answer

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

Question 2

Dissolution is the process by which a board of directors converts a corporation's assets into cash and distributes them among creditors and shareholders.

Accepted Answer

A) True 
 B)False

Question 3

Aggressors often try to win the favor of a few institutional investors that own large blocs of shares.

Accepted Answer

A) True 
 B)False

Question 4

The attempt of Grow True Corporation to take over Grassroots Corporation despite the objection of management and the board of Grassroots Corporation is referred to as which of the following?

Accepted Answer

A)  Surprise takeover
B)  Under the table takeover
C)  Planned takeover
D)  Strategic takeover
E)  Hostile takeoverF) B) and E)
G) A) and E)

Question 5

Assuming Calvin and Daniella can exercise their appraisal rights in this situation,what must they do?

Accepted Answer

A)  They must issue a statement demanding adequate compensation for their shares.
B)  They must file a notice with the Secretary of State objecting to the merger and demanding fair market value for their shares.
C)  They must issue a statement demanding the vote be re-cast.
D)  They must issue a statement demanding the merger be declared null and void.
E)  They must file a demand with a court for fair market value for their shares.F) A) and E)
G) None of the above

Question 6

In a consolidation,the surviving or consolidated corporation compensates shareholders of the corporation that no longer exists.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following occurs when a target corporation offers to buy its shareholders' stock?

Accepted Answer

A)  A leveraged buyout
B)  A self-tender offer
C)  A challenge-tender offer
D)  An illegal tender offer
E)  A cross-tender offerF) B) and E)
G) All of the above

Question 8

In the Case Opener,a decision of the Federal Trade Commission blocking a proposed merger between Polypore and Microporous Products was appealed on the basis that it would substantially lessen competition.Which of the following was the result on appeal?

Accepted Answer

A)  That the Federal Trade Commission erred in asserting jurisdiction over the dispute and that the matter would be remanded to the federal district court.
B)  That although the Federal Trade Commission erred in treating the merger as a horizontal merger rather than as a vertical merger,the Commission properly determined that the proposed merger would substantially lessen competition.
C)  That the Federal Trade Commission erred in treating the merger as a vertical merger instead of a horizontal merger and that the proposed merger should have been allowed to proceed.
D)  That the Federal Trade Commission properly determined that a horizontal merger was involved that would substantially lessen competition.
E)  That the Federal Trade Commission erred in determining that the proposed merger would substantially lessen competition and that the merger should have been allowed to proceed.F) C) and E)
G) None of the above

Question 9

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

Accepted Answer

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

Question 10

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

Exam 40: Corporations: Mergers, consolidations, terminations

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

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
verified

The attempt of Grow True Corporation to take over Grassroots Corporation despite the objection of management and the board of Grassroots Corporation is referred to as which of the following?

Correct Answer
verified

Dissolution is the process by which a board of directors converts a corporation's assets into cash and distributes them among creditors and shareholders.

Correct Answer
verified

Aggressors often try to win the favor of a few institutional investors that own large blocs of shares.

Correct Answer
verified

Which of the following occurs when a target corporation offers to buy its shareholders' stock?

Correct Answer
verified

In the Case Opener,a decision of the Federal Trade Commission blocking a proposed merger between Polypore and Microporous Products was appealed on the basis that it would substantially lessen competition.Which of the following was the result on appeal?

Correct Answer
verified

In a consolidation,the surviving or consolidated corporation compensates shareholders of the corporation that no longer exists.

Correct Answer
verified

Assuming Calvin and Daniella can exercise their appraisal rights in this situation,what must they do?

Correct Answer
verified

Exam 40: Corporations: Mergers, consolidations, terminations

Correct AnswerverifiedShow Answer

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

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 attempt of Grow True Corporation to take over Grassroots Corporation despite the objection of management and the board of Grassroots Corporation is referred to as which of the following?

Correct AnswerverifiedShow Answer

Dissolution is the process by which a board of directors converts a corporation's assets into cash and distributes them among creditors and shareholders.

Correct AnswerverifiedShow Answer

Aggressors often try to win the favor of a few institutional investors that own large blocs of shares.

Correct AnswerverifiedShow Answer

Which of the following occurs when a target corporation offers to buy its shareholders' stock?

Correct AnswerverifiedShow Answer

In the Case Opener,a decision of the Federal Trade Commission blocking a proposed merger between Polypore and Microporous Products was appealed on the basis that it would substantially lessen competition.Which of the following was the result on appeal?

Correct AnswerverifiedShow Answer

In a consolidation,the surviving or consolidated corporation compensates shareholders of the corporation that no longer exists.

Correct AnswerverifiedShow Answer

Assuming Calvin and Daniella can exercise their appraisal rights in this situation,what must they do?

Correct AnswerverifiedShow Answer

Correct Answer
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