As a governance mechanism the “threat of takeover” refers to: a) The risk that the government might acquire the firm b) The danger that the firm might be acquired by others who offer the stockholders better management of the firm. c) Both A and B d) Neither A nor B
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66) As a governance mechanism the “threat of takeover” refers to:
a) The risk that the government might acquire the firm
b) The danger that the firm might be acquired by others who offer the stockholders better management of the firm.
c) Both A and B
d) Neither A nor B
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- These facts will be used for questions 1 - 10. A, an individual, transfers land with an adjusted basis of 40 and fair market value of 100, to Newco in exchange for 50 Newco shares, fair market value of 100. B, an individual, transfers equipment with an adjusted basis of 70 and fair market value of 110 to Newco in exchange for 50 Newco shares, fair market value 100, plus GM (General Motors) stock with a fair market value of 10. 1. What is A's realized gain or loss? a loss 10 30 O 60 none of the above What is A's recognized gain or loss? Oa loss 10 30 O 60 none of the above What is B's realized gain or loss? a loss 10 O 30 60 none of the above18- An agreement in which recognized company sells the right for others to use company name and operating plan to sell products or services is termed as: a. None of the options b. Franchising c. Manufacturing d. Mining3. With respect to foreclosure, give the reason you agree or disagree with the statements below: a. A foreclosure sale eliminates the outstanding debt(s) of the individual being foreclosed. b. Proceeds of a foreclosure sale are distributed to those holding a lien on the property on the basis of the percentage of total debt each is owed. c. Foreclosure means the senior mortgage loan lender automatically takes ownership of the property.
- Companies A and B differ only in their capital structure. A is financed 30% debt and 70% equity: B is financed 10% debt and 90% equity. The debt of both companies is risk-free. a. Rosencrantz owns 1% of the common stock of A. What other investment package would produce identical cash flow for Rosencrantz? b. Guildenstern owns 2% of common stock of B. What other investment package would produce identical cash flows for Guildenstern?1. Harmony Inc. is a B Corp. It has received an offer from ABC Inc. which would like to purchase one of Harmony's manufacturing plants in Pennsylvania. The purchase price to be paid by ABC is higher than harmony might have anticipated, but, ABC plans to automate most of the plant, which would illuminate numerous jobs at the plant. Must harmony except the offer? Discuss. Would your answer be different if Harmony were not a B Corp? 2. Why might Anya Phillips prefer to operate her medical practice as an LLC rather than a professional corporation?Globex Corp. has 1000 shareholders as of 31 Dec 2019. On that date Globex Corp released its earnings. The earnings for the period is $1 million. The management decided to distribute all the earnings to the shareholders. On 25th March 2020 Globex Corp issued another 1000 shares to a new set of shareholders. On 31 Dec 2020 Globex Corp reported earnings of $1 million. The management again decided to distribute all its profit to shareholders. i. What is the dividend per share on 31 Dec 2019? ii. What is the dividend per share on 31 Dec 2020?- iii. How does the dividend per share on 31 Dec 2020 affect the old shareholders? Explain clearly.
- art IScenario IAgroVate, a Delaware corporation, is the target of a bid from Bijoux. Bijoux had originally approached AgroVateâs board with an offer to buy the company, but AgroVate turned down the offer. Now, in newspaper ads and direct mail to shareholders, Bijoux has initiated a tender offer to shareholders well above market price.The Board of Directors of AgroVate consists of the three Maxxo brothers, Happy, Dopey and Sleepy, as well as eight other directors who are not related to the Marx Brothers. AgroVateâs bylaws provide that eight directors constitute a quorum.Manly Pearson, the president of Bijoux, wants to take control of AgroVate and merge it with Bijoux. He plans to replace the current board and sell off AgroVateâs widget finishing division, which he thinks is dragging the company down. Pearson has no interest in the widget business; Bijoux makes service uniforms; Pearson simply sees the takeover as a business…1.1) Differentiate between the different types of partnerships. In your answer:• identify the types of partnership• explain the characteristics of that particular partnership• explain the liability of each of the partners with respect to the type ofpartnership 1.2) Judy is a shareholder in Pat-X Ltd. She believes that she can use the sharecertificate to make a payment. She wants to exchange the certificate for apair of shoes. The last time she checked the shares were valued at a R1000and she figures she could put them to good use. Can she do so? Discuss withreference to the nature of a share certificate.Bailey is a limited partner in his company. A general partner in his company is going on an extended vacation and has asked Bailey to run the company while he is gone. If Bailey agrees to do so, he will no longer qualify as a limited partner. ( a) True b) False
- 23 - Which of the following is the process of converting a company from one legal form to another, that is, as a trading company of another type that will maintain its legal and economic identity and continuity, with a different status and title suitable for the company type?A) Liquidation in CompaniesB) Company mergerC) Division in CompaniesD) Re-establishing a CompanyE) Type changeThe board of directors of Northshore plc decided to make a takeover bid for South Shore plc. After the decision was taken, but before it was announced the following chain of events occurred: Blue, a director of Northshore plc, buys shares in South Shore plc Blue tells his friend White about the likelihood of the takeover and White buys shares in South Shore White in turn passes on the information to his friend Green who also buys shares in South Shore Green tells his friend Grey about the information, and he too buys shares in South Shore At a dinner party Blue, without telling him about the takeover proposal, advises his brother Tom to buy shares in South Shore and Tom does so. Questions: Explain the Fiduciary duties of Directors and their relevance. Based on your knowledge of the Director’s duties and powers, explain whether the parties are guilty in each chain of events or the implications.What it is talking about? 1. Incorporation of a company Ø Minimum number of shareholders and directorsEvery company requires at least one member, a director and a company secretary. Have at least one director who is a natural person (s457) Ø Effects of incorporation The company is capable of exercising all the functions of an incorporated company (e.g. separate legal entity, artificial person like entering into contracts in its own name, or taking legal action against other), and has perpetual succession. On and after the date of incorporation, the founder members, and any other persons who may from time to time become the company’s members, are liable to contribute to the assets of the company in the event of the company being wound up as is mentioned in Cap. 32.èLimited Liabilities