Question 1

All forms of business organizations limit the liability of their owners.​

Accepted Answer

A) True 
 B)False

Question 2

Mediterranean Herbs Inc. wants to purchase all of the assets of Nature's Spice Company. Approval of the deal must be obtained from the shareholders of​

Accepted Answer

A)   ​Mediterranean Herbs only.
B)   ​Nature's Spice only.
C)   ​both corporations.
D)   ​neither corporation.E) None of the above
F) C) and D)

Question 3

Corporate creditors are required to approve a plan of merger or consolidation, or a share exchange.​

Accepted Answer

A) True 
 B)False

Question 4

Fact Pattern 41-3​
DIY Fasteners Company decides to consolidate its operations with Evergrip Studs, Inc., to form Fit-Rite Bolts & Screws Inc.
-Refer to Fact Pattern 41-3. Evergrip had rights in certain property. After the consolidation, Fit-Rite acquires the rights​

Accepted Answer

A)   ​automatically.
B)   ​only after completing certain additional statutory procedures.
C)   only if Evergrip's former shareholders expressly approve.
D)   only if the acquisition is a specified result of the consolidation.E) A) and B)
F) C) and D)

Question 5

When a corporation is dissolved voluntarily, its assets can be liquidated without notice to its creditors.​

Accepted Answer

A) True 
 B)False

Question 6

A firm may respond to a tender offer in only one way.

Accepted Answer

A) True 
 B)False

Question 7

Appraisal rights are always the only recourse available to shareholders dissatisfied with the price received for their stock.​

Accepted Answer

A) True 
 B)False

Question 8

A merger between Blended Beverage Corporation and Cowland Creamery Inc. can be expressed as Blended Beverage + Cowland Creamery =​

Accepted Answer

A)   Cowland Creamery.
B)   ​Delite Dairy Corporation.
C)   ​Delite Dairy Corporation + EZ Stir & Sip Inc.
D)   ​EZ Stir & Sip Inc.E) All of the above
F) C) and D)

Question 9

​Share exchanges are often used to create holding companies.

Accepted Answer

A) True 
 B)False

Question 10

Fact Pattern 41-3​
DIY Fasteners Company decides to consolidate its operations with Evergrip Studs, Inc., to form Fit-Rite Bolts & Screws Inc.
-Refer to Fact Pattern 41-3. The articles of consolidation differ from Fit-Rite's articles of incorporation. The articles​

Accepted Answer

A)   ​are replaced by Evergrip's articles of incorporation.
B)   ​are replaced by the articles of consolidation.
C)   ​effectively prevent the consolidation.
D)   ​prevail.E) C) and D)
F) A) and B)

Question 11

To resist a takeover, a target company may make a self-tender.​

Accepted Answer

A) True 
 B)False

Question 12

In a consolidation, two or more corporations combine in such a way that only one corporation continues to exist.

Accepted Answer

A) True 
 B)False

Question 13

Ground-Up Construction Corporation has a right of action against Heav-Equip, Inc. Ground-Up Construction merges with Investors Development, Inc., with Investors absorbing Ground-Up. After the merger, Ground-Up's right of action against Heav-Equip can be exercised by​

Accepted Answer

A)   ​Ground-Up.
B)   ​Investors.
C)   ​Heav-Equip.
D)   ​no one.E) A) and B)
F) B) and C)

Question 14

Dissolution of a corporation can be brought about by an agreement between the shareholders and the board of directors.​

Accepted Answer

A) True 
 B)False

Question 15

AgroChem, Inc., attempts to acquire a substantial number of the shares of Beanfield Seed Company through a public offer to shareholders. This is​

Accepted Answer

A)   ​a consolidation.
B)   ​a tender offer.
C)   ​a short-form merger.
D)   ​a dissolution.E) All of the above
F) A) and D)

Question 16

On a merger, one corporation inherits all of the rights and liabilities of its predecessors.​

Accepted Answer

A) True 
 B)False

Question 17

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

A)   ​a sole proprietorship.
B)   a corporation.​
C)   ​a limited partnership.
D)   ​a limited liability company.E) B) and C)
F) A) and D)

Question 18

The business judgment rule may apply to determine whether directors acted reasonably in resisting a takeover attempt.​

Accepted Answer

A) True 
 B)False

Question 19

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

A)   ​the liability of the owners.
B)   ​the forms of competitors' business organizations.
C)   ​tax considerations.
D)   ​the need for capital.E) A) and B)
F) All of the above

Question 20

Through a certain transaction, Coffee Bean Cafés, Inc., acquires all of the shares of Deli Dining Corporation for some of Coffee Bean's shares. Both Coffee Bean and Deli Dining continue to exist. This is​

Accepted Answer

A)   ​a consolidation.
B)   ​a share exchange.
C)   ​a short-form merger.
D)   ​a purchase of assets.E) A) and D)
F) None of the above

Exam 41: Mergers and Takeovers

To resist a takeover, a target company may make a self-tender.​

Correct AnswerverifiedShow Answer

All forms of business organizations limit the liability of their owners.​

Correct AnswerverifiedShow Answer

In a consolidation, two or more corporations combine in such a way that only one corporation continues to exist.

Correct AnswerverifiedShow Answer

​Share exchanges are often used to create holding companies.

Correct AnswerverifiedShow Answer

Mediterranean Herbs Inc. wants to purchase all of the assets of Nature's Spice Company. Approval of the deal must be obtained from the shareholders of​

Correct AnswerverifiedShow Answer

On a merger, one corporation inherits all of the rights and liabilities of its predecessors.​

Correct AnswerverifiedShow Answer

The business judgment rule may apply to determine whether directors acted reasonably in resisting a takeover attempt.​

Correct AnswerverifiedShow Answer

When a corporation is dissolved voluntarily, its assets can be liquidated without notice to its creditors.​

Correct AnswerverifiedShow Answer

Corporate creditors are required to approve a plan of merger or consolidation, or a share exchange.​

Correct AnswerverifiedShow Answer

A merger between Blended Beverage Corporation and Cowland Creamery Inc. can be expressed as Blended Beverage + Cowland Creamery =​

Correct AnswerverifiedShow Answer

Through a certain transaction, Coffee Bean Cafés, Inc., acquires all of the shares of Deli Dining Corporation for some of Coffee Bean's shares. Both Coffee Bean and Deli Dining continue to exist. This is​

Correct AnswerverifiedShow Answer

Dissolution of a corporation can be brought about by an agreement between the shareholders and the board of directors.​

Correct AnswerverifiedShow Answer

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​

Correct AnswerverifiedShow Answer

A firm may respond to a tender offer in only one way.

Correct AnswerverifiedShow Answer

Ground-Up Construction Corporation has a right of action against Heav-Equip, Inc. Ground-Up Construction merges with Investors Development, Inc., with Investors absorbing Ground-Up. After the merger, Ground-Up's right of action against Heav-Equip can be exercised by​

Correct AnswerverifiedShow Answer

AgroChem, Inc., attempts to acquire a substantial number of the shares of Beanfield Seed Company through a public offer to shareholders. This is​

Correct AnswerverifiedShow Answer

Appraisal rights are always the only recourse available to shareholders dissatisfied with the price received for their stock.​

Correct AnswerverifiedShow Answer

Fact Pattern 41-3​ DIY Fasteners Company decides to consolidate its operations with Evergrip Studs, Inc., to form Fit-Rite Bolts & Screws Inc. -Refer to Fact Pattern 41-3. The articles of consolidation differ from Fit-Rite's articles of incorporation. The articles​

Correct AnswerverifiedShow Answer

Fact Pattern 41-3​ DIY Fasteners Company decides to consolidate its operations with Evergrip Studs, Inc., to form Fit-Rite Bolts & Screws Inc. -Refer to Fact Pattern 41-3. Evergrip had rights in certain property. After the consolidation, Fit-Rite acquires the rights​

Correct AnswerverifiedShow Answer

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​

Correct AnswerverifiedShow Answer

To resist a takeover, a target company may make a self-tender.

Correct Answer
verified

All forms of business organizations limit the liability of their owners.

Correct Answer
verified

Correct Answer
verified

Share exchanges are often used to create holding companies.

Correct Answer
verified

Mediterranean Herbs Inc. wants to purchase all of the assets of Nature's Spice Company. Approval of the deal must be obtained from the shareholders of

Correct Answer
verified

On a merger, one corporation inherits all of the rights and liabilities of its predecessors.

Correct Answer
verified

The business judgment rule may apply to determine whether directors acted reasonably in resisting a takeover attempt.

Correct Answer
verified

When a corporation is dissolved voluntarily, its assets can be liquidated without notice to its creditors.

Correct Answer
verified

Corporate creditors are required to approve a plan of merger or consolidation, or a share exchange.

Correct Answer
verified

A merger between Blended Beverage Corporation and Cowland Creamery Inc. can be expressed as Blended Beverage + Cowland Creamery =

Correct Answer
verified

Through a certain transaction, Coffee Bean Cafés, Inc., acquires all of the shares of Deli Dining Corporation for some of Coffee Bean's shares. Both Coffee Bean and Deli Dining continue to exist. This is

Correct Answer
verified

Dissolution of a corporation can be brought about by an agreement between the shareholders and the board of directors.

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Ground-Up Construction Corporation has a right of action against Heav-Equip, Inc. Ground-Up Construction merges with Investors Development, Inc., with Investors absorbing Ground-Up. After the merger, Ground-Up's right of action against Heav-Equip can be exercised by

Correct Answer
verified

AgroChem, Inc., attempts to acquire a substantial number of the shares of Beanfield Seed Company through a public offer to shareholders. This is

Correct Answer
verified

Appraisal rights are always the only recourse available to shareholders dissatisfied with the price received for their stock.

Correct Answer
verified

Fact Pattern 41-3 DIY Fasteners Company decides to consolidate its operations with Evergrip Studs, Inc., to form Fit-Rite Bolts & Screws Inc. -Refer to Fact Pattern 41-3. The articles of consolidation differ from Fit-Rite's articles of incorporation. The articles

Correct Answer
verified

Fact Pattern 41-3 DIY Fasteners Company decides to consolidate its operations with Evergrip Studs, Inc., to form Fit-Rite Bolts & Screws Inc. -Refer to Fact Pattern 41-3. Evergrip had rights in certain property. After the consolidation, Fit-Rite acquires the rights

Correct Answer
verified

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

Correct Answer
verified