A Merger Increases the Number of Voting Shares of the Surviving

question 17

Multiple Choice

A merger increases the number of voting shares of the surviving corporation by 23 percent.Which of the following is required in this context?

• A)a unanimous vote of the incumbent directors
• B)a majority vote among the board of directors
• C)a majority vote of shareholders
• D)an affirmative vote by at least 30 percent of shareholders

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Definitions:

Internal Rate of Return

A financial metric used to estimate the profitability of potential investments by calculating the rate of return at which the net present value of costs (cash outflows) equals the net present value of benefits (cash inflows).

Average Rate of Return

A financial ratio used to measure the profitability of an investment, calculated as the average annual profit divided by the initial investment cost.

Cash Payback Period

The time period required for the cash inflows from a capital investment project to cover the initial cash outlay.

Net Cash Inflow

The surplus of cash revenues over cash expenses in a given period, indicating the liquidity added to an entity.