Ch40-TB1-WBL-10e - Chapter40 Corporations...

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Chapter 40 Corporations— Merger, Consolidation, and Termination N.B.:   TYPE  indicates that a question is new, modified, or unchanged, as  follows. N A question  new  to this edition of the Test Bank. + A question  modified  from the previous edition of the Test Bank, = A question  included  in the previous edition of the Test Bank. TRUE/FALSE QUESTIONS 1. In a merger, the articles of incorporation of the surviving corporation are  deemed  not  to include any changes that are stated in the articles of merger. ANSWER: F PAGE: 806 TYPE: = 2. After a merger, the disappearing corporation retains all of its preexisting  obligations. ANSWER: F PAGE: 806 TYPE: = 3. After a merger, a disappearing corporation’s preexisting rights disappear. ANSWER: F PAGE: 806 TYPE: N 4. In a consolidation, the consolidating corporations become subsidiaries of the  new corporation. 145
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146 TEST BANK 1—UNIT EIGHT: BUSINESS ORGANIZATIONS ANSWER: F PAGE: 808 TYPE: = 5. After a consolidation, the new corporation inherits all of the consolidating  corporations’  obligations . ANSWER: T PAGE: 808 TYPE: + 6. After a consolidation, there are two or more surviving corporations. ANSWER: F PAGE: 808 TYPE: N 7. In a consolidation, the consolidating corporation’s shareholders do not need  to approve the consolidation. ANSWER: F PAGE: 809 TYPE: = 8. A short-form merger can be used whenever a parent owns more than 10  percent of the stock of its subsidiary. ANSWER: F PAGE: 809 TYPE: = 9. Shareholder   appraisal   rights   are   normally   available   in   sales   of   sub- stantially all corporate assets  not  in the ordinary course of business. ANSWER: T PAGE: 809 TYPE: N 10. Appraisal rights are available only when a state statute specifically pro- vides for them. ANSWER: T PAGE: 809 TYPE: = 11. The fair value of shares under appraisal rights is always the value on the  day the shareholder files the notice of dissent. ANSWER: F PAGE: 811 TYPE: = 12. Shareholder approval is required when a corporation  sells  all of its assets to  another company. ANSWER: T PAGE: 812 TYPE: +
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CHAPTER 40: CORPORATIONS—MERGER, CONSOLIDATION, AND TERMINATION 147 13. Shareholder approval is required when a corporation  buys  all of the assets  of another company. ANSWER: F PAGE: 812 TYPE: + 14. When a sale of assets amounts to what in effect is a consolidation, the ac- quiring corporation does  not  inherit the selling corporation’s  liabilities . ANSWER: F PAGE: 812 TYPE: =
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148 TEST BANK 1—UNIT EIGHT: BUSINESS ORGANIZATIONS 15. The board of directors of a targeted corporation must approve a tender offer  before its shareholders can accept it.
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