O A dutyQuestion 43Which of the following is true about mergers?Shareholders of the acquired corporation must be paid a premium on their sharesThe shareholders of the surviving corporation must approve the merger.The MBCA does not recognize mergers done solely for the profit motive.A merger may be invalidated if it freezes out minority shareholders.

Merger refers to a type of deal or transaction in which two or more than two legal entities join forces and it results in a new separate legal entity. It can enable the entities to share their resource, reduce competition, utilize their assets, collaborate, increase sales, achieve major market share, and reduce advertising and marketing costs. The correct answer is Option B.Reason: In order to conclude a merger successfully, it is mandatory to ensure that the shareholders of each involved corporation give their consent to the proposed merger deal. The consent of the shareholders of the surviving corporation is mandatory for the merger deal. In some regions, when the total voting share exceeds 20%, the consent of shareholders of the surviving corporation is mandatory to approve the merger deal.Reason for incorrect optionsOption A: Although the shareholders of the acquiring corporation are paid a premium on their shares, however, this is to motivate them to approve the deal by using premium as an incentive. There is no such rule that the shareholders of the acquiring corporation must be provided with a premium.Option C: The majority of the merger deals are somehow linked to the profit motive. It allows the sharing of resources, reduces competition, and entry into markets, and increases revenue and customer base. This impacts the profitability and increases the profits. Option D: This option is incorrect because the minority shareholders must accept the proposed merger deal if it is approved by the majority shareholders. They will have to exchange their shares with the acquiring company. Option B: The surviving corporation’s shareholders must give their approval to the merger deal.

Answered: Question 43 Which of the following is…

Question 43 Which of the following is true about mergers? Shareholders of the acquired corporation must be paid a premium on their shares The shareholders of the surviving corporation must approve the merger. door not recognize mergers done solely for the profit motive.