Question 1

Garden Company and Home Corporation make a plan to consolidate. Once approved, the plan will be filed with

Accepted Answer

A)   a holding company.
B)   a parent corporation.
C)   the appropriate state's secretary of state.
D)   the U.S. Department of Commerce.E) A) and D)
F) B) and D)

Question 2

Mergers, consolidations, and share exchanges are authorized

Accepted Answer

A)   in all states.
B)   in most states.
C)   in no states.
D)   by the federal government.E) B) and C)
F) B) and D)

Question 3

One corporation that owns all of the shares of another corporation is a subsidiary corporation.

Accepted Answer

A) True 
 B)False

Question 4

Repair Inc. issues a plan to combine operations with Service Company. Tom is a shareholder who disapproves of the deal. He may be entitled to an appraisal right if the combination is

Accepted Answer

A)   a merger or a short-form merger.
B)   none of the choices.
C)   a purchase of substantially all of the assets of either corporation.
D)   a dissolution or winding up of either corporation.E) C) and D)
F) B) and D)

Question 5

When dissolution takes place by voluntary action, the members of the board of directors act as trustees of the corporate assets.

Accepted Answer

A) True 
 B)False

Question 6

All states have statutes authorizing share exchanges for domestic corporations.

Accepted Answer

A) True 
 B)False

Question 7

On a consolidation, a new corporation acquires all of the assets and liabilities of the corporations that were consolidated.

Accepted Answer

A) True 
 B)False

Question 8

Lumber Company owns more than 90 percent of the shares of Mill Corporation. A plan for a merger of Lumber and Mill must be approved by the directors of

Accepted Answer

A)   both corporations.
B)   Lumber only.
C)   Mill only.
D)   neither corporation.E) C) and D)
F) All of the above

Question 9

Building Corporation and Construction Inc. combine so that only Construction continues to exist. This is

Accepted Answer

A)   a takeover.
B)   a merger.
C)   a liquidation.
D)   a share exchange.E) A) and B)
F) A) and C)

Question 10

All of the shares of GMO Inc. are owned by Hybrid Inc. GMO Inc. is

Accepted Answer

A)   a holding company.
B)   a parent corporation.
C)   a subsidiary corporation.
D)   none of the choices.E) B) and D)
F) C) and D)

Question 11

Farm Inc. combines its assets and liabilities with those of Grain Company to form Harvest Corporation. Farm and Grain cease to exist. With respect to the liabilities of Farm and Grain, Harvest acquires

Accepted Answer

A)   none.
B)   only those acquired after the combination was proposed.
C)   an amount equal to the ratio of the firms' pre-merger market values.
D)   all.E) B) and C)
F) A) and B)

Question 12

Apps Inc. decides to combine its operations with Beta Company to form Computer Software Inc. Apps and Beta are domestic corporations. Before a vote is taken on the proposed combination, sufficient information to evaluate the deal must be given to each corporation's

Accepted Answer

A)   shareholders.
B)   creditors.
C)   officers and other employees.
D)   none of the choices.E) All of the above
F) B) and C)

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Revenue Inc. owns more than 90 percent of the shares of Sales Corporation. A copy of a plan for a merger of Revenue and Sales must be sent to each shareholder of

Accepted Answer

A)   both corporations.
B)   Revenue.
C)   Sales.
D)   neither corporation.E) A) and C)
F) A) and B)

Question 15

In a merger, the surviving corporation assumes all of the assets and liabilities of the disappearing corporation.

Accepted Answer

A) True 
 B)False

Question 16

No state allows the combination of domestic and foreign corporations.

Accepted Answer

A) True 
 B)False

Question 17

Operation Corporation acquires all of the assets of Process Inc. by direct purchase. Operation assumes the liabilities of Process if

Accepted Answer

A)   a court does not impose the liabilities on Operation.
B)   the sale does not amount to a merger or a consolidation.
C)   Operation replaces Process's personnel without continuing its business.
D)   none of the choices.E) A) and B)
F) A) and C)

Question 18

Corporate creditors are required to approve a plan of consolidation.

Accepted Answer

A) True 
 B)False

Question 19

Only one of the boards of directors of the corporations involved must approve a merger.

Accepted Answer

A) True 
 B)False

Question 20

A court can dissolve a corporation for abuse of corporate powers.

Accepted Answer

A) True 
 B)False

Exam 35: Corporate Mergers, Takeovers, and Termination

Apps Inc. decides to combine its operations with Beta Company to form Computer Software Inc. Apps and Beta are domestic corporations. Before a vote is taken on the proposed combination, sufficient information to evaluate the deal must be given to each corporation's

Correct AnswerverifiedShow Answer

A court can dissolve a corporation for abuse of corporate powers.

Correct AnswerverifiedShow Answer

All states have statutes authorizing share exchanges for domestic corporations.

Correct AnswerverifiedShow Answer

Operation Corporation acquires all of the assets of Process Inc. by direct purchase. Operation assumes the liabilities of Process if

Correct AnswerverifiedShow Answer

Garden Company and Home Corporation make a plan to consolidate. Once approved, the plan will be filed with

Correct AnswerverifiedShow Answer

In a merger, the surviving corporation assumes all of the assets and liabilities of the disappearing corporation.

Correct AnswerverifiedShow Answer

Mergers, consolidations, and share exchanges are authorized

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Building Corporation and Construction Inc. combine so that only Construction continues to exist. This is

Correct AnswerverifiedShow Answer

Lumber Company owns more than 90 percent of the shares of Mill Corporation. A plan for a merger of Lumber and Mill must be approved by the directors of

Correct AnswerverifiedShow Answer

On a consolidation, a new corporation acquires all of the assets and liabilities of the corporations that were consolidated.

Correct AnswerverifiedShow Answer

All of the shares of GMO Inc. are owned by Hybrid Inc. GMO Inc. is

Correct AnswerverifiedShow Answer

No state allows the combination of domestic and foreign corporations.

Correct AnswerverifiedShow Answer

Farm Inc. combines its assets and liabilities with those of Grain Company to form Harvest Corporation. Farm and Grain cease to exist. With respect to the liabilities of Farm and Grain, Harvest acquires

Correct AnswerverifiedShow Answer

When dissolution takes place by voluntary action, the members of the board of directors act as trustees of the corporate assets.

Correct AnswerverifiedShow Answer

Only one of the boards of directors of the corporations involved must approve a merger.

Correct AnswerverifiedShow Answer

One corporation that owns all of the shares of another corporation is a subsidiary corporation.

Correct AnswerverifiedShow Answer

Corporate creditors are required to approve a plan of consolidation.

Correct AnswerverifiedShow Answer

Revenue Inc. owns more than 90 percent of the shares of Sales Corporation. A copy of a plan for a merger of Revenue and Sales must be sent to each shareholder of

Correct AnswerverifiedShow Answer

Repair Inc. issues a plan to combine operations with Service Company. Tom is a shareholder who disapproves of the deal. He may be entitled to an appraisal right if the combination is

Correct AnswerverifiedShow Answer

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