Asked by Muhammad Saddam on Jun 26, 2024
Verified
When merger or consolidation is at issue, some states deny the right to vote and receive dividends to dissenting shareholders who exercise their appraisal rights.
Dissenting Shareholders
Shareholders who do not agree with certain corporate actions, such as mergers and acquisitions, and who may have specific rights to demand the corporation buy back their shares at a fair value.
Appraisal Rights
Legal rights that allow shareholders to demand an independent evaluation of a company's shares during certain transactions.
Dividends
Payments made by a corporation to its shareholders, usually derived from the company's profits.
- Gain insight into the effects of shareholder rights, with a focus on the rights of dissenting shareholders in the context of mergers and consolidations.
Verified Answer
LS
Landon SeabrooksJul 03, 2024
Final Answer :
True
Explanation :
In some states, when a shareholder dissents from a merger or consolidation and exercises their appraisal rights, they may lose their rights to vote and receive dividends while their appraisal rights are being determined. This is to prevent dissenting shareholders from both challenging the fairness of the transaction and benefiting from it during the appraisal process.
Learning Objectives
- Gain insight into the effects of shareholder rights, with a focus on the rights of dissenting shareholders in the context of mergers and consolidations.