Question 1

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) B) and C)
G) A) and B)

Question 2

Which of the following is a term for the attempt of Green Corporation to take over Tree Corporation over the objection of management and the board of Tree Corporation?

Accepted Answer

A)   Under the table takeover
B)   Surprise takeover
C)   Strategic takeover
D)   Hostile takeover
E)   Planned takeoverF) A) and B)
G) B) and D)

Question 3

Consolidation does not require shareholder approval.

Accepted Answer

A) True 
 B)False

Question 4

By offering to give shareholders in Tree Corporation stock in Green Corporation in return for shares of stock in Tree Corporation,Green Corporation made a[n] ____.

Accepted Answer

A)   Exchange offer
B)   Stock tender offer
C)   Hostile offer
D)   Illegal offer
E)   Control tender offerF) B) and C)
G) D) and E)

Question 5

When voluntary dissolution procedures are initiated,which of the following must occur first?

Accepted Answer

A)   The directors must file articles of dissolution with the secretary of state.
B)   The directors must notify the local court with jurisdiction over any claims.
C)   The officers must resign.
D)   The directors must resign.
E)   The court must appoint a receiver.F) C) and D)
G) B) and E)

Question 6

Which of the following occurs when a legal contract combines two or more corporations such that only one of the corporations continues to exist?

Accepted Answer

A)   A merger
B)   A consolidation
C)   A combination
D)   An alteration
E)   A reorganizationF) B) and E)
G) B) and C)

Question 7

Which of the following is generally false when a consolidation occurs?

Accepted Answer

A)   The new corporation has independent legal status.
B)   The original corporations continue to exist legally.
C)   The consolidated entity assumes the debts of the original corporations.
D)   The consolidated entity obtains the original corporations' assets.
E)   The consolidated entity takes on the rights of the original companies.F) A) and E)
G) C) and D)

Question 8

Which of the following terms describes Tree Corporation in the attempt of Green Corporation to gain control?

Accepted Answer

A)   Target corporation
B)   Vulnerable corporation
C)   Accessible corporation
D)   Hostile corporation
E)   Weak corporationF) A) and E)
G) D) and E)

Question 9

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 10

Which of the following is true regarding Quill's suggestion that dissolution be implemented quickly in order to avoid claims by creditors?

Accepted Answer

A)   His suggestion was a good one because in that way, the claims could likely be avoided.
B)   His suggestion would not avoid claims because the law requires that creditors be allowed at least 120 days after dissolution in order to make a claim.
C)   Whether or not his suggestion will help depends on the corporation's articles of incorporation which set forth the time period during which creditors may file claims following dissolution.
D)   Whether or not his suggestion will help depends on the corporation's bylaws which set forth the time period during which creditors may file claims following dissolution.
E)   His suggestion was a good one only for debts outstanding for over 1 year; otherwise, the creditors have at least six months following dissolution in which to make claims.F) All of the above
G) A) and E)

Question 11

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 E)
G) B) and C)

Question 12

What is generally the next step for an aggressor after acquiring a substantial number of the target corporation's shares and why?

Accepted Answer

After acquiring a substantial number of ...

Question 13

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) A) and E)
G) B) and D)

Question 14

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 15

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) A) and D)
G) B) and D)

Question 16

Which of the following occurs when a group within a corporation,usually management,buys all outstanding corporate stock held by the public?

Accepted Answer

A)   An asset purchase
B)   A leveraged buyout
C)   A management buyout
D)   A corporate buyout
E)   An illegal buyoutF) A) and C)
G) B) and D)

Question 17

When an asset purchase occurs,the acquiring corporation assumes ownership and control over tangible,but not intangible,assets of the selling corporation.

Accepted Answer

A) True 
 B)False

Question 18

In a merger,what happens to the property of the absorbed corporation?

Accepted Answer

A)   It must be sold and distributed to the absorbed corporation's 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 C)
G) B) and E)

Question 19

Which of the following is true regarding situations in which a court may order an involuntary dissolution of a corporation?

Accepted Answer

A)   A court may order an involuntary dissolution of a corporation under the following four circumstances: when the corporation has failed to show a profit for over two years, when the corporation obtained its article of incorporation fraudulently, when the directors have abused their power, and when the corporation is insolvent.
B)   A court may order an involuntary dissolution of a corporation under the following three circumstances: when the corporation obtained its article of incorporation fraudulently, when the directors have abused their power, and when the corporation is insolvent.
C)   A court may order an involuntary dissolution of a corporation under the following three circumstances: when the corporation has failed to show a profit for over two years, when the corporation obtained its article of incorporation fraudulently, and when the directors have abused their power.
D)   A court may order an involuntary dissolution of a corporation under the following three circumstances: when the corporation has failed to show a profit for over two years, when the corporation obtained its article of incorporation fraudulently, and when the corporation is insolvent.
E)   A court may only order an involuntary dissolution of a corporation when the corporation is insolvent.F) None of the above
G) A) and D)

Question 20

Set forth the universal requirements for a merger or acquisition including what most states require in regard to shareholder approval.

Accepted Answer

The following requirements apply for a m...

Exam 40: Corporations: Mergers, Consolidations, and Termination

Which of the following is a term for the attempt of Green Corporation to take over Tree Corporation over the objection of management and the board of Tree Corporation?

Correct AnswerverifiedShow Answer

What is generally the next step for an aggressor after acquiring a substantial number of the target corporation's shares and why?

Correct AnswerverifiedAfter acquiring a substantial number of ...View AnswerShow Answer

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

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

In a merger,what happens to the property of the absorbed corporation?

Correct AnswerverifiedShow Answer

Which of the following occurs when a group within a corporation,usually management,buys all outstanding corporate stock held by the public?

Correct AnswerverifiedShow Answer

When an asset purchase occurs,the acquiring corporation assumes ownership and control over tangible,but not intangible,assets of the selling corporation.

Correct AnswerverifiedShow Answer

Which of the following occurs when a legal contract combines two or more corporations such that only one of the corporations continues to exist?

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 generally false when a consolidation occurs?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When voluntary dissolution procedures are initiated,which of the following must occur first?

Correct AnswerverifiedShow Answer

Which of the following is true regarding situations in which a court may order an involuntary dissolution of a corporation?

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

Which of the following is true regarding Quill's suggestion that dissolution be implemented quickly in order to avoid claims by creditors?

Correct AnswerverifiedShow Answer

By offering to give shareholders in Tree Corporation stock in Green Corporation in return for shares of stock in Tree Corporation,Green Corporation made a[n] ____.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Set forth the universal requirements for a merger or acquisition including what most states require in regard to shareholder approval.

Correct AnswerverifiedThe following requirements apply for a m...View AnswerShow Answer

Consolidation does not require shareholder approval.

Correct AnswerverifiedShow Answer

Which of the following terms describes Tree Corporation in the attempt of Green Corporation to gain control?

Correct AnswerverifiedShow Answer

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After acquiring a substantial number of ...
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Once an aggressor has presented its offe...
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The following requirements apply for a m...
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