Exam 38: Corporate Acquisitions and Multinational Corporations

A merged corporation ceases to exist after the merger.

The ________ is a federal law that mandates the president of the United States to suspend, prohibit, or dismantle the acquisition of U.S. businesses by foreign investors if there is credible evidence that the foreign investor might take action that threatens to impair the "national security."

Karlovsky and Sons Inc., a retail corporation, reports financial losses for three years in a row. Two larger corporations, Gatsby Retail Inc. and Chelsea Sales Corp. compete to acquire Karlovsky and Sons. Initially, Chelsea places a higher bid than Gatsby Retail but eventually backs out of the merger. In the end, a Boston-based multinational company (MNC) named J.Y. Corp. acquires Karlovsky and Sons and permits the latter to expand as a wholesaler. Which of the following is the surviving corporation in this scenario?

Shareholder approval is not required to make any changes in a corporation.

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

An ordinary merger or share exchange requires the recommendation of the board of directors of each corporation.

The corporation that owns the shares of the subsidiary corporation in a share exchange is known as the ________.

The corporation that is owned by the parent corporation in a share exchange is known as the surviving corporation.

Which of the following is true of defensive measures against a tender offer?

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

The federal proxy rules promote ________ during proxy solicitation.

The ________ is an amendment to the Securities Exchange Act of 1934 that specifically regulates tender offers.

Section 14(a) of the Securities Exchange Act of 1934 requires the disclosure of the identities of the parties involved in a tender offer.

Which of the following is true of a share exchange?

A subsidiary corporation ceases to exist after a share exchange.

Mr. Davidson, who owns 17 percent of his company's shares, is displeased with the six incumbent directors of the corporation. He proposes a slate of directors consisting of five other persons and himself to become members of the board of directors of the corporation and replace the incumbent directors. In the proxy contest, Mr. Davidson manages to acquire proxies from shareholders who control only 35 percent of the company's shares. Which of the following is true in this context?

________ are made without the permission of the target company's management.

A(n) ________ refers to a written document signed by a shareholder that authorizes another person to vote the shareholder's shares.

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

Section 14(a) of the Securities Exchange Act gives the Securities and Exchange Commission (SEC) the authority to regulate ________.