[Gaming Merger] Calvin and Daniella each own 5% of GamePower, a video game design company. GamePower is seeking to merge with GameKing, and before a shareholder meeting, Calvin and Daniella email all other shareholders and corporate representatives about their disagreement with the proposed transaction. At the shareholder meeting, they vote against the merger with GameKing, but, 90% of the shareholders vote in favor of the merger. Calvin tells Daniella that it is not fair that they are forced to be part of GameKing. Daniella tells him they have no choice, so get used to it.
-Assuming Calvin and Daniella properly exercise their appraisal rights, how is the value of their shares generally determined?
A) By the value of the shares on the day following the shareholder vote.
B) By the value of the shares on the day of the shareholder vote.
C) By the value of the shares on the day before the shareholder vote.
D) By the value of the shares on the day the merger is finalized.
E) By the value of the shares of similarly sized corporations.

Question

Quizplus · Accepted Answer

The value of shares for the purpose of appraisal rights is generally determined by their value on the day before the shareholder vote. This is because the value on this day reflects the company's worth before any merger-related changes or speculations influence the stock price.

[Gaming Merger] Calvin and Daniella Each Own 5% of GamePower