In a Merger Situation, What Is the Right of a Dissenting

question 14

Multiple Choice

In a merger situation, what is the right of a dissenting shareholder?

• A) to block the merger until satisfied regarding its terms.
• B) to have their shares appraised and purchased by the corporation.
• C) to enforce a consolidation instead of a merger.
• D) dissenting shareholders have no rights with respect to a merger.

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Definitions:

Liquidity Premium

The portion of a nominal interest rate or bond yield that represents compensation for lack of liquidity.

Inflation

An indicator of how quickly the overall price level for goods and services increases, leading to a decrease in buying power.

Inflation Premium

The additional yield that investors demand on securities to compensate for the loss of purchasing power due to inflation.

Nominal Interest Rate

The stated interest rate of a bond or loan, which does not account for inflation or the compounding of interest.