Question 1

Greenmail refers to a target corporation's purchase of its stock from an actual or perceived tender offeror at a premium.

Accepted Answer

A) True 
 B)False

Question 2

A ________ is a defensive strategy built into the target corporation's articles of incorporation,corporate bylaws,or contracts and leases that can be adopted to defeat a tender offer.

Accepted Answer

A) greenmail agreement 
B) Pac-Man tender offer 
C) white knight merger 
D) poison pill 
A) greenmail agreement 
B) Pac-Man tender offer 
C) white knight merger 
D) poison pill

Question 3

A merged corporation ceases to exist after the merger.

Accepted Answer

A) True 
 B)False

Question 4

________ refers to the purchase by a target corporation of its stock from an actual or perceived tender offeror at a premium.

Accepted Answer

A) White knight merger 
B) Appraisal 
C) Share exchange 
D) Greenmail 
A) White knight merger 
B) Appraisal 
C) Share exchange 
D) Greenmail

Question 5

Section 14(e)protects shareholders from fraud committed in connection with a tender offer.

Accepted Answer

A) True 
 B)False

Question 6

A short-form merger does not require the approval of the board of directors of the subsidiary corporation.

Accepted Answer

A) True 
 B)False

Question 7

The ________ protects the decisions of a board of directors that acts on an informed basis,in good faith,and in the honest belief that the action taken was in the best interests of the corporation and its shareholders.

Accepted Answer

A) Williams Act 
B) antifraud provision of the Securities and Exchange Commission 
C) pro rata rule 
D) business judgment rule 
A) Williams Act 
B) antifraud provision of the Securities and Exchange Commission 
C) pro rata rule 
D) business judgment rule

Question 8

Which of the following best defines a merged corporation?

Accepted Answer

A) a corporation that is absorbed in the merger and ceases to exist after the merger 
B) a corporation that is absorbed in the merger and continues to exist after the merger 
C) a corporation that is not absorbed in the merger but acquired stake in the surviving corporation 
D) a corporation that is not absorbed in the merger but is owned by a parent company 
A) a corporation that is absorbed in the merger and ceases to exist after the merger 
B) a corporation that is absorbed in the merger and continues to exist after the merger 
C) a corporation that is not absorbed in the merger but acquired stake in the surviving corporation 
D) a corporation that is not absorbed in the merger but is owned by a parent company

Question 9

Section 14(a)of the Securities Exchange Act prohibits omissions of material facts in proxy materials.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is a valid tender offer rule?

Accepted Answer

A) The offer cannot be closed after 20 business days after the commencement of the tender offer. 
B) The offer cannot be extended if the tender offeror increases the number of shares it will take or the price it will pay for the shares. 
C) Any increase in price paid for shares tendered must be offered to all shareholders, including those who have previously tendered their shares. 
D) A shareholder who tenders his or her shares loses the right to withdraw them prior to the closing of the tender offer. 
A) The offer cannot be closed after 20 business days after the commencement of the tender offer. 
B) The offer cannot be extended if the tender offeror increases the number of shares it will take or the price it will pay for the shares. 
C) Any increase in price paid for shares tendered must be offered to all shareholders, including those who have previously tendered their shares. 
D) A shareholder who tenders his or her shares loses the right to withdraw them prior to the closing of the tender offer.

Question 11

Which of the following is required for a short-form merger?

Accepted Answer

A) approval of shareholders of the parent corporation alone 
B) approval of shareholders of the subsidiary corporation alone 
C) approval of the board of directors of the parent corporation alone 
D) approval of the board of directors of the subsidiary corporation alone 
A) approval of shareholders of the parent corporation alone 
B) approval of shareholders of the subsidiary corporation alone 
C) approval of the board of directors of the parent corporation alone 
D) approval of the board of directors of the subsidiary corporation alone

Question 12

A ________ is a situation in which one corporation acquires all the shares of another corporation,and both corporations retain their separate legal existence.

Accepted Answer

A) reverse takeover 
B) merger 
C) share exchange 
D) spin-off 
A) reverse takeover 
B) merger 
C) share exchange 
D) spin-off

Question 13

A proxy contest is one in which incumbent directors are impeached.

Accepted Answer

A) True 
 B)False

Question 14

The approval of the surviving corporation's shareholders is not required if the merger or share exchange increases the number of voting shares of the surviving corporation by 20 percent or less.

Accepted Answer

A) True 
 B)False

Question 15

A ________ is a merger between a parent corporation and a subsidiary corporation that does not require the approval of the board of directors of the subsidiary corporation.

Accepted Answer

A) share exchange 
B) short-form merger 
C) short-term merger 
D) reverse takeover 
A) share exchange 
B) short-form merger 
C) short-term merger 
D) reverse takeover

Question 16

Section 14(a)of the Securities Exchange Act of 1934 is a(n)________.

Accepted Answer

A) investment provision 
B) antifraud provision 
C) share exchange provision 
D) antitakeover statute 
A) investment provision 
B) antifraud provision 
C) share exchange provision 
D) antitakeover statute

Question 17

What is a proxy? State the federal rules that govern a proxy statement.

Accepted Answer

A proxy is a written document that is co

Question 18

A(n)________ is a situation in which one corporation is absorbed into another corporation and ceases to exist.

Accepted Answer

A) alliance 
B) merger 
C) share exchange 
D) coalition 
A) alliance 
B) merger 
C) share exchange 
D) coalition

Question 19

A tender offer targets the board of directors of the target corporation.

Accepted Answer

A) True 
 B)False

Question 20

What does the Delaware antitakeover statute provide? How can an acquirer evade the restrictions imposed by this statute?

Accepted Answer

The Delaware antitakeover statute provid

Exam 38: Corporate Acquisitions and Multinational Corporations

Greenmail refers to a target corporation's purchase of its stock from an actual or perceived tender offeror at a premium.

A ________ is a defensive strategy built into the target corporation's articles of incorporation,corporate bylaws,or contracts and leases that can be adopted to defeat a tender offer.

A merged corporation ceases to exist after the merger.

________ refers to the purchase by a target corporation of its stock from an actual or perceived tender offeror at a premium.

Section 14(e)protects shareholders from fraud committed in connection with a tender offer.

A short-form merger does not require the approval of the board of directors of the subsidiary corporation.

The ________ protects the decisions of a board of directors that acts on an informed basis,in good faith,and in the honest belief that the action taken was in the best interests of the corporation and its shareholders.

Which of the following best defines a merged corporation?

Section 14(a)of the Securities Exchange Act prohibits omissions of material facts in proxy materials.

Which of the following is a valid tender offer rule?

Which of the following is required for a short-form merger?

A ________ is a situation in which one corporation acquires all the shares of another corporation,and both corporations retain their separate legal existence.

A proxy contest is one in which incumbent directors are impeached.

The approval of the surviving corporation's shareholders is not required if the merger or share exchange increases the number of voting shares of the surviving corporation by 20 percent or less.

A ________ is a merger between a parent corporation and a subsidiary corporation that does not require the approval of the board of directors of the subsidiary corporation.

Section 14(a)of the Securities Exchange Act of 1934 is a(n)________.

What is a proxy? State the federal rules that govern a proxy statement.

A(n)________ is a situation in which one corporation is absorbed into another corporation and ceases to exist.

A tender offer targets the board of directors of the target corporation.

What does the Delaware antitakeover statute provide? How can an acquirer evade the restrictions imposed by this statute?

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