Appraisal Rights Self-Quiz








Shareholders of X Co. have decided to sue for appraisal rights. The courts are now trying to determine a price for the shares that the shareholders decided not to sell. Such a trial is known as a determination of:
Choice 1 discounted cash flow.
Choice 2 fair market value.
Choice 3 shareholders' rights.
Choice 4 The Price is Right.
Under which of the following conditions are shareholders most likely to be entitled to appraisal rights?
Choice 1 a board resolution that eliminates the dividend rights of all shareholders.
Choice 2 the election of two board directors.
Choice 3 changing the location of the firm's offices.
Choice 4 changing the corporate letterhead.
Tim is a shareholder in Y Corp. He has decided that he would like to assert appraisal rights. Which of the following would pose a problem for his being able to assert those rights?
Choice 1 The transaction did not provide Y Corp. shareholders with the best deal.
Choice 2 Tim sent a letter to Y Corp's secretary prior to the shareholder meeting.
Choice 3 Tim voted for the transaction at the annual shareholder meeting.
Choice 4 The acquiring firm is a former competitor of Y Corp.
A court has been asked to render a judgment as to the fair market value (FMV) of Z Corp. after a recent merger it conducted with another firm. In evaluating the value of the firm, which of the following items might the court take into consideration?
Choice 1 the market price of the consideration paid to the shareholders of Z Corp.
Choice 2 a history of the value of Z Corp's stock over the last ten years.
Choice 3 competing prices offered by other potential buyers in the transaction.
Choice 4 all of the above.
In constructing a discounted cash flow model of a company for appraisal / fair market valuation purposes, the researcher would look at which of the following items?
Choice 1 a history of the firm's operating cash flows over a period of time.
Choice 2 a projection of the firm's operating cash flows over a period of time.
Choice 3 a projection of the firm's terminal value at some point in the future.
Choice 4 all of the above

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