Down River Markets Has Decided to Acquire a Controlling Interest

question 59

Multiple Choice

Down River Markets has decided to acquire a controlling interest in Blue Jays by purchasing shares of stock in the public markets.Which of the following statements correctly apply to this acquisition?
I.The purchase of publicly-traded shares may be more expensive than an outright merger with Blue Jays would have been.
II.Down River Markets can avoid dealing with the board of directors of Blue Jays by purchasing shares in this manner.
III.If Down River Markets is successful in acquiring at least 80 percent of the outstanding shares of Blue Jays,the remaining shareholders in Blue Jays will be forced to also sell their shares to Down River Markets.
IV.Whether or not Down River Markets gains control of Blue Jays depends upon the willingness of Blue Jays shareholders to sell their shares.

• A)I and III only
• B)II and IV only
• C)I, II, and IV only
• D)I, II, and III only
• E)I, II, III, and IV

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Definitions:

Discharge

The act of fulfilling or settling an obligation or debt.

Chapter 13

A type of bankruptcy filing in the United States that allows individuals with regular income to develop a plan to repay all or part of their debts.

Payments

The transfer of money, goods, or services from one party to another as fulfillment of an obligation or settlement of a debt.

Plan

A detailed proposal for doing or achieving something, often outlining objectives, strategies, and actions.