If a dissenting shareholder exercises an appraisal right when a proposed merger is involved, which of the following is generally used to determine the value of stock?
A) The value of shares on the day after the shareholder vote.
B) The value of shares on the day before the shareholder vote.
C) The value of shares on the day of the shareholder vote.
D) The value of shares 10 days before the shareholder vote.
E) The value of shares on the day the proposed merger was announced.

Question

Quizplus · Accepted Answer

The value of shares on the day before the shareholder vote is generally used to determine the value of stock when a dissenting shareholder exercises an appraisal right in the context of a proposed merger. This is because it reflects the last market price before the effect of the merger decision was known, aiming to establish a fair valuation unaffected by the merger announcement or speculation.

If a Dissenting Shareholder Exercises an Appraisal Right When a Proposed