Question 1

In a short-form merger,neither the approval of the shareholders of either corporation nor the approval of the board of directors of the subsidiary corporation is needed.

Accepted Answer

In a short-form merger, no shareholder or board of directors approval is needed as it is initiated by the parent company.

Question 2

To make a tender offer,the tender offeror's board of directors must approve the offer.

Accepted Answer

The tender offeror's board of directors must approve the offer before it can be made. This is because the board of directors is responsible for overseeing the company's operations and making decisions that are in the best interests of the company and its shareholders.

Question 3

To obtain appraisal rights,a dissenting shareholder must deliver written notice of his or her intent to demand payment of his or her shares to the corporation before the vote is taken,and not vote his or her shares in favor of the proposed action.

Accepted Answer

This statement is correct. In order to obtain appraisal rights, a dissenting shareholder must adhere to the requirements stated, including delivering written notice of intent to demand payment of shares before the vote and abstaining from voting in favor of the proposed action.

Question 4

In a tender offer,the tendering corporation and the target corporation retain their separate legal status.

Accepted Answer

In a tender offer, both the tendering corporation and the target corporation retain their separate legal status. The tender offer is a transaction between two separate entities and does not result in a merger or acquisition of one company by the other. However, if the tender offer is successful, the acquiring company may gain significant control over the target company's operations and decision-making processes.

Question 5

After a share exchange,one corporation (the principal corporation)owns all the shares of the other corporation (the agent corporation).

Accepted Answer

The answer of After a share exchange,one corporation (the principal...

Question 6

Hostile tender offers can be made without any prior attempt by a tender offeror to acquire the target company through a voluntary merger or purchase.

Accepted Answer

Hostile tender offers are made without the prior agreement or cooperation of the target company, and do not involve any prior attempts to acquire the company through a voluntary merger or purchase.

Question 7

The dissenting shareholder appraisal right allows a shareholder to request appraisal of the shares to be acquired in a merger,and the tender offer price will be adjusted based on the appraisal.

Accepted Answer

The dissenting shareholder appraisal right allows a shareholder to request a court to determine the fair value of their shares, but it does not directly adjust the tender offer price. Instead, it provides an alternative remedy for shareholders who disagree with the merger terms.

Question 8

A short-form merger procedure is simpler than an ordinary merger.

Accepted Answer

A short-form merger procedure involves the parent company acquiring the remaining shares of a subsidiary without a vote from the shareholders. This process is simpler than an ordinary merger which usually requires approval from the majority of shareholders.

Question 9

If the parent corporation owns 51 percent or more of the outstanding shares of the subsidiary corporation,a short-form merger procedure may be followed to merge the two corporations.

Accepted Answer

The answer of If the parent corporation owns 51 percent...

Question 10

A corporate sale or lease of its assets requires the recommendation of the board of directors and an affirmative vote of the majority of the shares of the selling or leasing corporation that are entitled to vote (unless greater vote is required).

Accepted Answer

This statement accurately reflects the legal requirements for a corporate sale or lease of assets, as specified in most state and federal corporate laws. The board of directors typically has the authority to make decisions regarding major transactions involving the corporation's assets, subject to the approval of the shareholders who have voting rights. The exact voting threshold may vary depending on the specific circumstances and governing documents of the corporation.

Question 11

If the board of directors of a target corporation does not agree to a merger or an acquisition,the acquiring corporation can make a tender offer for the shares directly to the shareholders of the target corporation.

Accepted Answer

This is a common strategy used in hostile takeovers, where the board of directors is opposed to the acquisition or merger. The acquiring corporation can bypass the board and make an offer directly to the shareholders, who then have the option to sell their shares and bypass the board's decision.

Question 12

A short-form merger is a simplified form of merger that can be used so long as the number of voting shares outstanding of the surviving corporation increases by less than twenty percent.

Accepted Answer

A short-form merger is a simplified merger process that occurs when a parent company owns a significant majority (typically 90% or more) of a subsidiary's shares, allowing the merger without the approval of minority shareholders, not based on the percentage increase of voting shares.

Question 13

A corporation must notify shareholders of the existence of their appraisal rights before a transaction can be voted on.

Accepted Answer

According to corporate law, a corporation must provide notice of appraisal rights to its shareholders before a transaction can be voted on. This notice must be provided in a timely manner and must contain information about the terms and conditions of the appraisal process. Failure to provide notice can result in legal action being taken against the corporation.

Question 14

Share exchanges are often used to create holding company arrangements.

Accepted Answer

Share exchanges can be used to merge companies or create holding company structures. When two or more companies merge, they may choose to form a new company, where the shares of each individual company are exchanged for shares in the new entity. This can also be done to create a holding company, where the shares of each company are owned by the holding company, giving it control over its subsidiaries.

Question 15

A shareholder loses the ability to exercise the appraisal right by voting in favor of the proposed action.

Accepted Answer

According to most corporate laws, voting in favor of the proposed action waives the shareholder's right to exercise appraisal rights.

Question 16

A shareholder exercising his or her appraisal right can have the corporation petition the court to determine the value of shares,if the shareholder believes that the corporation has set the value too low.

Accepted Answer

This statement is true. Shareholders can exercise their appraisal rights if they disagree with the value set by the corporation and petition the court for a determination of the fair value of their shares.

Question 17

In a share exchange,both corporations continue their separate legal existence.

Accepted Answer

In a share exchange, both corporations continue to exist as separate legal entities but the shareholders of one corporation will receive shares in the other corporation in exchange for their shares.

Question 18

One corporation can acquire all the shares of another corporation through a share default.

Accepted Answer

A share default does not exist as a term or concept in corporate law. A corporation can acquire all the shares of another corporation through a share purchase or merger, but not through a share default.

Question 19

A tender offer can be made for all or a portion of the shares of the target corporation.

Accepted Answer

A tender offer can be made for all or a portion of the shares of the target corporation. This allows the acquiring company to potentially gain control of the target company by acquiring a majority of its shares. The decision to tender shares is up to the individual shareholders, who can choose to accept or reject the offer.

Question 20

Ordinarily,a merger requires the approval of both boards of directors and the shareholders of both corporations.

Accepted Answer

This is true as per the general process of a merger, where the decision to merge must be approved by both companies' boards of directors and their shareholders.

Quiz 29: Corporate Acquisitions and Multinational Corporations