Deck 12: Mergers, Acquisitions, and Other Changes to the Corporate Structure

Question 1

In states following the Model Business Corporation Act, the shareholders of a corporation need not approve the restatement of the articles of incorporation if no amendment to provisions of the articles is included.

Answer 1

True

Question 2

Shareholder approval would not be required to amend a corporation's articles of incorporation to change the

A) authorized stock of the corporation before stock is issued.
B) voting rights of one class of stock.
C) number of authorized shares of stock of the corporation.
D) number of directors required on the corporation's board of directors.

Answer 2

A

Question 3

The allows courts to consider a certain transaction with characteristics of a merger to be considered a merger, regardless of what it is called, to prevent an injustice to third parties.

A) equitable merger rule
B) statutory merger rule
C) de facto merger doctrine
D) stock acquisition doctrine

Answer 3

C

Question 4

Most statutory mergers must be approved by the

A) surviving corporation's board of directors.
B) merging corporation's officers.
C) shareholders of the merging and surviving corporations.
D) president of the surviving corporation.

Question 5

When a merger becomes effective, the

A) shareholders of the surviving corporation surrender their shares.
B) articles of incorporation of the merging corporation become effective.
C) separate existence of every corporation or eligible entity that is merged into the survivor ceases.
D) shareholders of the merging corporation have no ownership in the surviving corporation.

Question 6

In states following the Model Business Corporation Act, the articles of merger must include

A) a restatement of the articles of incorporation.
B) information concerning the approval of the shareholders of all corporations that are a party to the merger.
C) a statement of the approval of the president of the merging corporation.
D) a copy of the bylaws of the surviving corporation.

Question 7

The triangle merger involves a parent corporation, a subsidiary of the parent corporation, and a target corporation.

Question 8

The Hart-Scott-Rodino Antitrust Improve- ments Act of 1976 gives the Federal Trade Commission the authority to review certain merger and acquisition transactions prior to their closing.

Question 9

A is a combination of two or more corporations, whereby one of the corporations survives and absorbs one or more other corporations, which cease to exist.

A) consolidation
B) statutory share exchange
C) merger
D) reorganization

Question 10

The purchasers in an asset acquisition will generally not be held liable for undisclosed liabilities and obligations of the target corporation stemming from prior transactions.

Question 11

If a merger has no clear business purpose other than to eliminate the minority shareholders, it may be found invalid.

Question 12

A is a transaction whereby one

Question 13

State entity conversion statutes generally provide for the conversion of

A) stock from one shareholder to another.
B) business corporations to nonprofit corporations.
C) one business corporation to another business corporation.
D) a corporation to a noncorporate entity.

Question 14

In states following the Model Business Corporation Act, shareholder approval of a statutory plan of exchange

A) is not necessary.
B) does not require voting by voting groups.
C) must be accomplished in the same manner as shareholder approval of a statutory merger.
D) is not required of the target corporation.

Question 15

In a stock acquisition, the acquiring corporation becomes a subsidiary of the target corporation.

Question 16

There is no difference in the end results between an asset acquisition and a statutory merger.

Question 17

In a stock purchase agreement, it is not necessary to identify in detail the exact assets and liabilities of the selling corporation.

Question 18

The terms merger and consolidation are interchangeable.

Question 19

The type of merger whereby the parent corporation is merged into a subsidiary is referred to as a(n)

A) share exchange.
B) subsidiary merger.
C) upstream merger.
D) downstream merger.

Question 20

Due diligence work is completed after the closing of mergers and acquisitions.

Question 21

Under the Sherman Act, the law is violated if a company tries to maintain or acquire a monopoly position through unreasonable methods.

Question 22

The statutes of most states prohibit the merger of a corporation with a noncorporate entity.

Question 23

All corporations contemplating a merger must file notice with the Federal Trade Commission pursuant to the Hart-Scott-Rodino Act.