Asked by Mandalyns Watters on Jul 24, 2024
Verified
Business Inc. acquires all of the assets of Commerce Corporation by direct purchase. Dot is a Commerce shareholder who does not approve of the deal. In most states, Dot can
A) reverse the deal so Commerce acquires all of the assets of Business.
B) insist that the companies carry out their corporate purposes.
C) demand appraisal rights.
D) require the parties to cancel the deal.
Appraisal Rights
Entitlement of a corporation's minority shareholders to have their shares appraised and to receive compensation at a fair market value in the event of certain corporate actions.
Acquires
The act of obtaining ownership or control over assets, properties, or companies, often through purchase or merger.
- Grasp shareholder rights in the context of corporate acquisitions and mergers.
Verified Answer
CB
Cindy BosséJul 24, 2024
Final Answer :
C
Explanation :
When a company acquires all the assets of another, shareholders who do not approve of the deal, like Dot, typically have the right to demand appraisal rights. This means they can request that their shares be bought out at a fair value, rather than being forced to go along with the deal. This does not reverse or cancel the deal, nor does it ensure the companies carry out their corporate purposes in any specific way.
Learning Objectives
- Grasp shareholder rights in the context of corporate acquisitions and mergers.
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