Two Security Services, A-To-Z Security and Secure-Safe Security, Propose to Merge

question 56

Essay

Two security services, A-to-Z Security and Secure-Safe Security, propose to merge. Each corporation has fewer than 10 shareholders. The proposed merger receives majority shareholder approval. Roberto, a minority shareholder who owns 10% of the stock in Secure-Safe Security, however, is very much opposed to the merger. He tells the other Secure-Safe shareholders that unless they convince him otherwise, he will block the merger. What are Roberto's rights as a dissenting shareholder, and does he have the power to block the merger?

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Definitions:

Debt-to-equity Ratio

An indicator showing the comparative levels of shareholders' equity and debt utilized in the financing of a company's assets.

Times Interest

A financial ratio that measures a company's ability to meet its interest obligations, calculated by dividing earnings before interest and taxes (EBIT) by the interest expenses.

Equity Multiplier

A financial leverage ratio that measures the portion of a company’s assets that are financed by stockholders’ equity, indicating the level of debt used to finance assets.

Current Ratio

An indicator of a company's proficiency in paying off its short-term dues using the assets it currently possesses.