Question 1

Repair Inc. issues a plan to combine operations with Service Company. Tom is a shareholder who disapproves of the deal. He may be entitled to an appraisal right if the combination is

Accepted Answer

According to most states' corporate laws, shareholders have appraisal rights in the event of a merger or a short-form merger. This means that if shareholders disagree with the deal, they may request that their shares be appraised to determine their fair value. The other options presented (B, C, and D) do not typically trigger appraisal rights under state law.

Question 2

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

Accepted Answer

Liquidation means the sale and distribution of the assets of a business on its termination.

Question 3

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

Accepted Answer

The answer of Rice Inc. seeks to purchase a substantial...

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

Dona can exercise her appraisal rights and receive fair value for her shares. This allows her to receive compensation for her shares without having to approve of the deal. However, this option may not be available in all states and may have specific requirements for shareholders to follow. The other options listed are not typically available to a shareholder in this type of transaction.

Question 5

Enchilada Inc. seeks to purchase a substantial number of the voting shares of Fajita Inc. Enchilada deals directly with the shareholders of Fajita. Enchilada offers a price higher than the market price of Fajita's shares. This is

Accepted Answer

Enchilada's offering a price higher than the market price of Fajita's shares directly to its shareholders is a tender offer. A tender offer is a public offer made by a company or a third party to the shareholders of a publicly traded company to buy their shares for a premium price, usually above the market price. The purpose of a tender offer is usually to gain control of the target company by acquiring a substantial number of its shares.

Question 6

Doris wants to form a new firm-eBeats-to market a new app. Fees are required to form all of the following business organizations except

Accepted Answer

Fees are not required to form a sole proprietorship.

Question 7

Alice and Bernie pool their money and talents to form Cutting Edge Corporation, a precision tooling company. They are the firm's only shareholders, directors, and officers. After five years of declining home prices, they decide to cease business. Can they simply dissolve their corporation at will? If so, what are the steps in the process?

Accepted Answer

The answer of Alice and Bernie pool their money and...

Question 8

Dissolution of a corporation can be brought about by

Accepted Answer

The answer of Dissolution of a corporation can be brought...

Question 9

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

Accepted Answer

The forms of competitors' business organizations are not a significant factor in deciding which form of business organization would be most appropriate for Boom!. The other factors listed (liability of owners, tax considerations, and need for capital) are all relevant considerations that could impact the choice of business organization.

Question 10

Operation Corporation acquires all of the assets of Process Inc. by direct purchase. Operation assumes the liabilities of Process if

Accepted Answer

When a corporation acquires all of the assets of another company by direct purchase and assumes its liabilities, the specific conditions listed in options A, B, and C do not determine whether the acquiring company assumes the liabilities. The assumption of liabilities typically depends on the terms of the acquisition agreement, the nature of the liabilities, and applicable laws, rather than the conditions described in the choices.

Question 11

Sweet Inc. acquires all of the assets of Tart Inc. by direct purchase. Approval of the deal between Sweet and Tart is subject to the approval of the shareholders of

Accepted Answer

In a direct purchase of assets, only the selling corporation's (Tart Inc.) shareholders typically need to approve the transaction, as they are the ones divesting their assets.

Question 12

Natural Food Corporation proposes to combine with Organic Produce Inc., and asks Natural Food shareholders to vote on the proposal. Phoebe, a Natural Food shareholder, votes against it, but is outvoted by the other shareholders. Is there an action that Phoebe can take to avoid being forced to go along with the transaction? If so, what can she do? After the combination, Organic Produce ceases to exist. Natural Food is the surviving firm. What type of combination is this?

Accepted Answer

The answer of Natural Food Corporation proposes to combine with...

Quiz 35: Corporate Mergers, Takeovers, and Termination