Question 1

A__________ is a combination of two or more corporations, whereby one of the corporations survives and absorbs one or more other corporations, which cease to exist.

Accepted Answer

A)   consolidation
B)   statutory share exchange
C)   merger
D)   reorganization

Question 2

The terms merger and consolidation are interchangeable.

Accepted Answer

A) True 
 B)False

Question 3

The triangle merger involves a parent corporation, a subsidiary of the parent corporation, and a target corporation.

Accepted Answer

A) True 
 B)False

Question 4

There is no difference in the end results between an asset acquisition and a statutory merger.

Accepted Answer

A) True 
 B)False

Question 5

In states following the Model Business Corporation Act, the shareholders of a corporation need not approve the restatement of the articles of incorporation if no amendment to provisions of the articles is included.

Accepted Answer

A) True 
 B)False

Question 6

The statutes of most states prohibit the merger of a corporation with a noncorporate entity.

Accepted Answer

A) True 
 B)False

Question 7

The Hart-Scott-Rodino Antitrust Improve- ments Act of 1976 gives the Federal Trade Commission the authority to review certain merger and acquisition transactions prior to their closing.

Accepted Answer

A) True 
 B)False  True

Question 8

Shareholder approval would not be required to amend a corporation's articles of incorporation to change the

Accepted Answer

A)   authorized stock of the corporation before stock is issued.
B)   voting rights of one class of stock.
C)   number of authorized shares of stock of the corporation.
D)   number of directors required on the corporation's board of directors.

Question 9

The purchasers in an asset acquisition will generally not be held liable for undisclosed liabilities and obligations of the target corporation stemming from prior transactions.

Accepted Answer

A) True 
 B)False

Question 10

A___________ is a transaction whereby onecorporation acquires all of the outstanding shares of one or more classes or series of another corporation by an exchange that is compulsory on the shareholders of the target corporation.

Accepted Answer

A)   stock acquisition
B)   statutory merger
C)   statutory share exchange
D)   compulsory share exchange C

Question 11

In states following the Model Business Corporation Act, shareholder approval of a statutory plan of exchange

Accepted Answer

A)   is not necessary.
B)   does not require voting by voting groups.
C)   must be accomplished in the same manner as shareholder approval of a statutory merger.
D)   is not required of the target corporation.

Question 12

The type of merger whereby the parent corporation is merged into a subsidiary is referred to as a(n)

Accepted Answer

A)   share exchange.
B)   subsidiary merger.
C)   upstream merger.
D)   downstream merger.

Question 13

The________ allows courts to consider a certain transaction with characteristics of a merger to be considered a merger, regardless of what it is called, to prevent an injustice to third parties.

Accepted Answer

A)   equitable merger rule
B)   statutory merger rule
C)   de facto merger doctrine
D)   stock acquisition doctrine

Question 14

When a merger becomes effective, the

Accepted Answer

A)   shareholders of the surviving corporation surrender their shares.
B)   articles of incorporation of the merging corporation become effective.
C)   separate existence of every corporation or eligible entity that is merged into the survivor ceases.
D)   shareholders of the merging corporation have no ownership in the surviving corporation.

Question 15

Due diligence work is completed after the closing of mergers and acquisitions.

Accepted Answer

A) True 
 B)False

Question 16

State entity conversion statutes generally provide for the conversion of

Accepted Answer

A)   stock from one shareholder to another.
B)   business corporations to nonprofit corporations.
C)   one business corporation to another business corporation.
D)   a corporation to a noncorporate entity.

Question 17

If a merger has no clear business purpose other than to eliminate the minority shareholders, it may be found invalid.

Accepted Answer

A) True 
 B)False  True

Question 18

Under the Sherman Act, the law is violated if a company tries to maintain or acquire a monopoly position through unreasonable methods.

Accepted Answer

A) True 
 B)False

Question 19

In a stock acquisition, the acquiring corporation becomes a subsidiary of the target corporation.

Accepted Answer

A) True 
 B)False

Question 20

Most statutory mergers must be approved by the

Accepted Answer

A)   surviving corporation's board of directors.
B)   merging corporation's officers.
C)   shareholders of the merging and surviving corporations.
D)   president of the surviving corporation.

Exam 12: Mergers, Acquisitions, and Other Changes to the Corporate Structure

A__________ is a combination of two or more corporations, whereby one of the corporations survives and absorbs one or more other corporations, which cease to exist.

Correct AnswerverifiedShow Answer

The terms merger and consolidation are interchangeable.

Correct AnswerverifiedShow Answer

The triangle merger involves a parent corporation, a subsidiary of the parent corporation, and a target corporation.

Correct AnswerverifiedShow Answer

There is no difference in the end results between an asset acquisition and a statutory merger.

Correct AnswerverifiedShow Answer

In states following the Model Business Corporation Act, the shareholders of a corporation need not approve the restatement of the articles of incorporation if no amendment to provisions of the articles is included.

Correct AnswerverifiedShow Answer

The statutes of most states prohibit the merger of a corporation with a noncorporate entity.

Correct AnswerverifiedShow Answer

The Hart-Scott-Rodino Antitrust Improve- ments Act of 1976 gives the Federal Trade Commission the authority to review certain merger and acquisition transactions prior to their closing.

Correct AnswerverifiedTrue

Shareholder approval would not be required to amend a corporation's articles of incorporation to change the

Correct AnswerverifiedShow Answer

The purchasers in an asset acquisition will generally not be held liable for undisclosed liabilities and obligations of the target corporation stemming from prior transactions.

Correct AnswerverifiedShow Answer

A___________ is a transaction whereby onecorporation acquires all of the outstanding shares of one or more classes or series of another corporation by an exchange that is compulsory on the shareholders of the target corporation.

Correct AnswerverifiedC

In states following the Model Business Corporation Act, shareholder approval of a statutory plan of exchange

Correct AnswerverifiedShow Answer

The type of merger whereby the parent corporation is merged into a subsidiary is referred to as a(n)

Correct AnswerverifiedShow Answer

The________ allows courts to consider a certain transaction with characteristics of a merger to be considered a merger, regardless of what it is called, to prevent an injustice to third parties.

Correct AnswerverifiedShow Answer

When a merger becomes effective, the

Correct AnswerverifiedShow Answer

Due diligence work is completed after the closing of mergers and acquisitions.

Correct AnswerverifiedShow Answer

State entity conversion statutes generally provide for the conversion of

Correct AnswerverifiedShow Answer

If a merger has no clear business purpose other than to eliminate the minority shareholders, it may be found invalid.

Correct AnswerverifiedTrue

Under the Sherman Act, the law is violated if a company tries to maintain or acquire a monopoly position through unreasonable methods.

Correct AnswerverifiedShow Answer

In a stock acquisition, the acquiring corporation becomes a subsidiary of the target corporation.

Correct AnswerverifiedShow Answer

Most statutory mergers must be approved by the

Correct AnswerverifiedShow Answer

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True

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C

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True

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