Question 1

What steps must a target corporation take once an aggressor has presented its offer to the target corporation's shareholders?

Accepted Answer

Once an aggressor has presented its offe...

Question 2

In a consolidation, what happens to the property of the original corporations?

Accepted Answer

A)   It must be sold and distributed to the respective shareholders.
B)   It must be held in trust for at least one year to satisfy claims of creditors.
C)   It must be held in trust for at least six months to satisfy claims of creditors.
D)   It must be placed within the jurisdiction of the secretary of state for at least one year in order to satisfy claims of creditors.
E)   None of these.F) A) and B)
G) B) and E)

Question 3

Death of a corporation occurs in which of the following phases?

Accepted Answer

A)   Dissolution and trial
B)   Dissolution and proceedings
C)   Dissolution and liquidation
D)   Reforming and liquidation
E)   Notification and liquidationF) C) and D)
G) C) and E)

Question 4

"Death." Barbara is president and a large shareholder in Reuse It, a corporation that sells used cellular telephones. Although the company was not insolvent, sales had been significantly down, and Barbara decided that it would be a good idea to discontinue the business. The board of directors agreed with her. The board members presented the proposal to discontinue the corporation to shareholders. Initially, Willy, a disgruntled shareholder, opposed ending the corporation. He claimed that the problem was that Barbara had done a poor job in management. Barbara planned to go forward with the termination of the company because a majority of the shareholders agreed. Willy, however, came around; and upon a second vote to discontinue the corporation, the vote was unanimous. Quill, a vice president of the corporation, was aware of a few outstanding debts owed by Reuse It. He suggested hurrying along quietly with ending the corporation because any claims not made before the corporation was dissolved could be avoided. Barbara told him that she was not sure that was a good idea. Therefore, the company proceeded with all appropriate notifications. When the time came to liquidate the corporation, the members of the board did not want to participate. Barbara was concerned about what action to take at that point because she really wanted to be finished with Reuse It.
-Which of the following is true of Barbara's plan to continue with disbanding the corporation over Willy's objection?

Accepted Answer

A)   She could not continue with her plan because unanimous approval of shareholders was required.
B)   She could proceed with her plan.
C)   It is unknown if she could proceed with her plan because Willy's agreement was essential if he owned more than 30% of the company's shares.
D)   It is unknown if she could proceed with her plan because Willy's agreement was essential if he owned more than 20% of the company's shares.
E)   It is unknown if she could proceed with her plan because Willy's agreement was essential if he owned more than 10% of the company's shares.F) A) and E)
G) C) and D)

Question 5

Which of the following occurs when an aggressor gradually accumulates the target company's shares?

Accepted Answer

A)   Controlled acquisition
B)   Timed acquisition
C)   Gradual acquisition
D)   Beachhead acquisition
E)   Pirate acquisitionF) A) and C)
G) All of the above

Question 6

Consolidation does not require shareholder approval.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is true regarding the type of intangible item that may constitute an asset?

Accepted Answer

A)   Goodwill, a company name, and a company logo all constitute types of intangible items that may constitute assets.
B)   Goodwill and a company name are types of intangible items that may constitute assets, but a company logo is not.
C)   Goodwill is a type of intangible item that may constitute an asset, but a company name and a company logo are not.
D)   A company name is a type of intangible item that may constitute an asset, but goodwill and a company logo are not.
E)   A company name and a company logo are types of intangible items that may constitute assets, but goodwill is not.F) A) and B)
G) C) and D)

Question 8

Which of the following is false regarding the merger process in South Africa?

Accepted Answer

A)   Shareholders cannot approve a merger unless 50 percent of all shareholders vote to accept the offer.
B)   Minority shareholders have access to South African courts and may employ them when disputes arise.
C)   The Companies Act establishes a panel to inquire about mergers or takeovers.
D)   The Companies Act and the rules of the Johannesburg Stock Exchange control mergers.
E)   If a change of corporate control takes place outside the stock exchange, the initiator of the merger must extend the offer to the shareholders and disclose all pertinent information to them within a reasonable amount of time.F) D) and E)
G) A) and B)

Question 9

Which of the following occurs when a target corporation offers to buy its shareholders' stock?

Accepted Answer

A)   A self-tender offer
B)   A leveraged buyout
C)   A cross-tender offer
D)   A challenge-tender offer
E)   An illegal tender offerF) A) and B)
G) A) and C)

Question 10

Which of the following describes a plan set up by ABC Company whereby its other shareholders may purchase shares of ABC stock at a significantly reduced price if any individual or entity obtains a majority of ABC Company's stock?

Accepted Answer

A)   Protection method
B)   Beachhead defense
C)   Poison pill
D)   Exchange offer
E)   Chose in actionF) A) and E)
G) A) and D)

Question 11

In a consolidation, shareholders of the new corporation create new articles of incorporation called ____.

Accepted Answer

A)   Revised articles of incorporation
B)   Merged articles of incorporation
C)   Articles of consolidation
D)   Revised articles of consolidation
E)   Independent articles of combinationF) B) and D)
G) A) and B)

Question 12

Which of the following is true regarding state approval of consolidations?

Accepted Answer

A)   There is no requirement that the state approve consolidations.
B)   After reviewing the plan to see that legal requirements are met, the secretary of state issues a certificate to grant approval.
C)   The secretary of state must approve consolidations so long as the corporate entity at issue has sufficient assets.
D)   The secretary of state must approve consolidations so long as creditors of the corporate entity at issue do not remain unpaid.
E)   The secretary of state must approve consolidations so long as no more than 10% of either company's shareholders object.F) All of the above
G) A) and E)

Question 13

If a merger increases the number of the surviving corporation's shares by no more than ______ percent, most states do not require the approval of the surviving corporation's shareholders.

Accepted Answer

A)   5
B)   10
C)   15
D)   20
E)   30F) All of the above
G) A) and B)

Question 14

In a short-form merger, the parent corporation must own at least ______ percent of the outstanding shares of each class of the subsidiary's stock.

Accepted Answer

A)   90
B)   75
C)   50
D)   40
E)   30F) None of the above
G) C) and D)

Question 15

Sally is the president of ABC Corporation. In November, her assistant Bruce tells her that Big Corporation is planning a tender offer and that it has presented an offer to shareholders. Sally tells him that they should keep information regarding ABC Corporation as quiet as possible until the end of the year because she does not want shareholders to find out any negative information regarding ABC Corporation's poor performance in the last few months. Which of the following is true regarding Sally's plan?

Accepted Answer

A)   It is a good plan only if a close corporation is involved; otherwise, Sally has a duty to reveal all pertinent facts to shareholders.
B)   It is a good plan only if an S Corporation is involved; otherwise, Sally has a duty to reveal all pertinent facts to shareholders.
C)   It is a good plan only if the corporation is new, meaning that it has been incorporated under one year; otherwise, Sally has a duty to reveal all pertinent facts to shareholders.
D)   It is a bad plan because Sally must at least inform the shareholders that she is withholding information until the end of the year.
E)   It is a bad plan because once an aggressor has presented its offer to the target corporation's shareholders, the target corporation's board of directors must inform shareholders of all facts pertinent to voting.F) A) and B)
G) A) and E)

Question 16

Aggressors often try to win the favor of a few institutional investors that own large blocs of shares.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following should occur in the face of the board not wishing to be involved in liquidation proceedings?

Accepted Answer

A)   A court should appoint a bankruptcy trustee to handle liquidation.
B)   A court should appoint a receiver not affiliated with the corporation to take over liquidation duties.
C)   Barbara, as president, is required to take over liquidation duties.
D)   The court should enter an injunction requiring all the directors to proceed with liquidation regardless of whether they want to do so.
E)   The court should enter an injunction requiring that at least half of the directors proceed with liquidation regardless of whether they want to do so.F) B) and C)
G) B) and D)

Question 18

Which of the following is true regarding liquidation?

Accepted Answer

A)   Liquidation is another name for dissolution.
B)   It is the process by which the board converts the corporation's assets into cash and distributes them among the corporation's creditors and shareholders.
C)   It begins immediately prior to dissolution.
D)   It is the process by which the board provides notice to the secretary of state that the corporation will no longer remain in existence.
E)   Liquidation duties fall upon officers of the corporation.F) None of the above
G) C) and E)

Question 19

Asset purchases are similar to mergers and consolidations because a corporation that purchases the assets of another corporation generally acquires its liabilities.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is true regarding approval a corporation desiring to sell a majority of its assets must obtain?

Accepted Answer

A)   A corporation desiring to sell a majority of its assets must obtain approval from officers, its board of directors, and shareholders.
B)   A corporation desiring to sell a majority of its assets must obtain approval from officers and its board of directors, but not from shareholders.
C)   A corporation desiring to sell a majority of its assets must obtain approval from its board of directors and shareholders, but not from officers.
D)   A corporation desiring to sell a majority of its assets must obtain approval from shareholders, but not from officers or its board of directors.
E)   A corporation desiring to sell a majority of its assets must obtain approval from its board of directors, but not from shareholders or officers.F) B) and E)
G) None of the above

Exam 40: Corporations: Mergers, Consolidations, Terminations

Which of the following is false regarding the merger process in South Africa?

Correct Answer
verified

In a consolidation, what happens to the property of the original corporations?

Correct Answer
verified

Asset purchases are similar to mergers and consolidations because a corporation that purchases the assets of another corporation generally acquires its liabilities.

Correct Answer
verified

Which of the following is true regarding state approval of consolidations?

Correct Answer
verified

Which of the following is true regarding liquidation?

Correct Answer
verified

In a short-form merger, the parent corporation must own at least ______ percent of the outstanding shares of each class of the subsidiary's stock.

Correct Answer
verified

Death of a corporation occurs in which of the following phases?

Correct Answer
verified

Correct Answer
verified

Which of the following should occur in the face of the board not wishing to be involved in liquidation proceedings?

Correct Answer
verified

Which of the following occurs when an aggressor gradually accumulates the target company's shares?

Correct Answer
verified

What steps must a target corporation take once an aggressor has presented its offer to the target corporation's shareholders?

Correct Answer
verified
Once an aggressor has presented its offe...
View Answer

Which of the following is true regarding the type of intangible item that may constitute an asset?

Correct Answer
verified

Correct Answer
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Which of the following describes a plan set up by ABC Company whereby its other shareholders may purchase shares of ABC stock at a significantly reduced price if any individual or entity obtains a majority of ABC Company's stock?

Correct Answer
verified

If a merger increases the number of the surviving corporation's shares by no more than ______ percent, most states do not require the approval of the surviving corporation's shareholders.

Correct Answer
verified

Which of the following is true regarding approval a corporation desiring to sell a majority of its assets must obtain?

Correct Answer
verified

Aggressors often try to win the favor of a few institutional investors that own large blocs of shares.

Correct Answer
verified

Which of the following occurs when a target corporation offers to buy its shareholders' stock?

Correct Answer
verified

Consolidation does not require shareholder approval.

Correct Answer
verified

In a consolidation, shareholders of the new corporation create new articles of incorporation called ____.

Correct Answer
verified

Exam 40: Corporations: Mergers, Consolidations, Terminations

Which of the following is false regarding the merger process in South Africa?

Correct AnswerverifiedShow Answer

In a consolidation, what happens to the property of the original corporations?

Correct AnswerverifiedShow Answer

Asset purchases are similar to mergers and consolidations because a corporation that purchases the assets of another corporation generally acquires its liabilities.

Correct AnswerverifiedShow Answer

Which of the following is true regarding state approval of consolidations?

Correct AnswerverifiedShow Answer

Which of the following is true regarding liquidation?

Correct AnswerverifiedShow Answer

In a short-form merger, the parent corporation must own at least ______ percent of the outstanding shares of each class of the subsidiary's stock.

Correct AnswerverifiedShow Answer

Death of a corporation occurs in which of the following phases?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following should occur in the face of the board not wishing to be involved in liquidation proceedings?

Correct AnswerverifiedShow Answer

Which of the following occurs when an aggressor gradually accumulates the target company's shares?

Correct AnswerverifiedShow Answer

What steps must a target corporation take once an aggressor has presented its offer to the target corporation's shareholders?

Correct AnswerverifiedOnce an aggressor has presented its offe...View AnswerShow Answer

Which of the following is true regarding the type of intangible item that may constitute an asset?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following describes a plan set up by ABC Company whereby its other shareholders may purchase shares of ABC stock at a significantly reduced price if any individual or entity obtains a majority of ABC Company's stock?

Correct AnswerverifiedShow Answer

If a merger increases the number of the surviving corporation's shares by no more than ______ percent, most states do not require the approval of the surviving corporation's shareholders.

Correct AnswerverifiedShow Answer

Which of the following is true regarding approval a corporation desiring to sell a majority of its assets must obtain?

Correct AnswerverifiedShow Answer

Aggressors often try to win the favor of a few institutional investors that own large blocs of shares.

Correct AnswerverifiedShow Answer

Which of the following occurs when a target corporation offers to buy its shareholders' stock?

Correct AnswerverifiedShow Answer

Consolidation does not require shareholder approval.

Correct AnswerverifiedShow Answer

In a consolidation, shareholders of the new corporation create new articles of incorporation called ____.

Correct AnswerverifiedShow Answer

Correct Answer
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Once an aggressor has presented its offe...
View Answer

Correct Answer
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