Question 1

A proxy card authorizes another person to vote the shareholder's shares.

Accepted Answer

A) True 
 B)False

Question 2

A proxy statement only requires the name of the proxy holder and the proxy.

Accepted Answer

A) True 
 B)False

Question 3

In the context of proxy solicitation information, which of the following is prohibited by Section 14(a) of the Securities Exchange Act?

Accepted Answer

A)  solicitation of proxies by a corporation 
B)  transfer of proxies from one shareholder to another 
C)  omission of material facts in the proxy material 
D)  proxy contests between shareholders and directors 
A)  solicitation of proxies by a corporation 
B)  transfer of proxies from one shareholder to another 
C)  omission of material facts in the proxy material 
D)  proxy contests between shareholders and directors

Question 4

A corporation that uses subsidiary corporations to operate in more than one country cannot be termed as a multinational corporation.

Accepted Answer

A) True 
 B)False

Question 5

Antitakeover statutes are model acts and do not become laws until a state legislature adopts them.

Accepted Answer

A) True 
 B)False

Question 6

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 7

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 8

A shareholder has a right to have the shareholder resolution included in the corporation's proxy materials if it ________.

Accepted Answer

A)  does not relate to the corporation's business 
B)  does not concern the payment of dividends 
C)  concerns the day-to-day operations of the corporation 
D)  does not concern a policy issue 
A)  does not relate to the corporation's business 
B)  does not concern the payment of dividends 
C)  concerns the day-to-day operations of the corporation 
D)  does not concern a policy issue

Question 9

In a proxy contest, only the incumbent directors are permitted to solicit proxies from shareholders.

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 best defines a surviving corporation?

Accepted Answer

A)  a corporation that continues its operations after filing for bankruptcy 
B)  a corporation that has been in existence for at least 50 years 
C)  a proprietorship or partnership that evolved into a corporation 
D)  a corporation that continues to exist after a merger 
A)  a corporation that continues its operations after filing for bankruptcy 
B)  a corporation that has been in existence for at least 50 years 
C)  a proprietorship or partnership that evolved into a corporation 
D)  a corporation that continues to exist after a merger

Question 12

Section 14(a) of the Securities Exchange Act prohibits the solicitation of proxies.

Accepted Answer

A) True 
 B)False

Question 13

Incumbent directors are the former directors of a corporation.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

Which of the following best defines a shareholder resolution?

Accepted Answer

A)  a document submitted by insurgent shareholders formally announcing forfeiture of shares 
B)  an issue submitted by the board of directors requiring the reorganization of shares held by shareholders 
C)  an issue submitted by a shareholder for a vote of other shareholders 
D)  a document that authorizes another person to vote the shareholder's shares 
A)  a document submitted by insurgent shareholders formally announcing forfeiture of shares 
B)  an issue submitted by the board of directors requiring the reorganization of shares held by shareholders 
C)  an issue submitted by a shareholder for a vote of other shareholders 
D)  a document that authorizes another person to vote the shareholder's shares

Question 16

________ are the rights of shareholders who object to a proposed merger to have their shares valued by the court and receive cash payment of this value from the corporation.

Accepted Answer

A)  Appraisal rights 
B)  Liquidation rights 
C)  Anti-acquisition rights 
D)  Anti-merger rights 
A)  Appraisal rights 
B)  Liquidation rights 
C)  Anti-acquisition rights 
D)  Anti-merger rights

Question 17

The pro rata rule states that any increase in price paid for shares tendered must be offered to all shareholders, even those who have previously tendered their shares.

Accepted Answer

A) True 
 B)False

Question 18

________ 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 19

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)  reverse tender offer 
C)  white knight merger 
D)  poison pill 
A)  greenmail agreement 
B)  reverse tender offer 
C)  white knight merger 
D)  poison pill

Question 20

________ shareholders are shareholders who propose a slate of directors to replace the incumbent directors.

Accepted Answer

A)  Exultant 
B)  Internal 
C)  Insurgent 
D)  External 
A)  Exultant 
B)  Internal 
C)  Insurgent 
D)  External

Exam 38: Corporate Acquisitions and Multinational Corporations

A proxy card authorizes another person to vote the shareholder's shares.

A proxy statement only requires the name of the proxy holder and the proxy.

In the context of proxy solicitation information, which of the following is prohibited by Section 14(a) of the Securities Exchange Act?

A corporation that uses subsidiary corporations to operate in more than one country cannot be termed as a multinational corporation.

Antitakeover statutes are model acts and do not become laws until a state legislature adopts them.

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.

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

A shareholder has a right to have the shareholder resolution included in the corporation's proxy materials if it ________.

In a proxy contest, only the incumbent directors are permitted to solicit proxies from shareholders.

Which of the following is a valid tender offer rule?

Which of the following best defines a surviving corporation?

Section 14(a) of the Securities Exchange Act prohibits the solicitation of proxies.

Incumbent directors are the former directors of a corporation.

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

Which of the following best defines a shareholder resolution?

________ are the rights of shareholders who object to a proposed merger to have their shares valued by the court and receive cash payment of this value from the corporation.

The pro rata rule states that any increase in price paid for shares tendered must be offered to all shareholders, even those who have previously tendered their shares.

________ refers to the purchase by a target corporation 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.

________ shareholders are shareholders who propose a slate of directors to replace the incumbent directors.

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