The correct option is c. a sale of substantially all of the corporate assets.
Beth could normally exercise appraisal rights if Cotton participates in sale of substantially all of the corporate assets.
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What are appraisal rights?</h3>
The legal right of a company's board of directors to have a court action or independent appraiser establish an acceptable stock price and compel the purchasing corporation to buy shares at a certain price is known as an appraisal right.
Some key features regarding appraisal rights are-
- A company's shareholders have the legal right to request a judicial procedure or an independent valuation of a company's shares in order to establish the stock price's fair market value. This legal right is known as an appraisal right.
- When their firm is being acquired and merged and the shareholders feel that the price being given is too low, they often use their appraisal rights.
- The fair price can be calculated using a variety of valuation techniques, such as asset-based approaches, income and cash flow methods, comparative market indicators, hybrid methods, and formula methods.
- Important investor rights like appraisal rights shield shareholders' investments from unfair, opportunistic, or poorly timed bids for their shares.
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The complete question is -
Beth is a shareholder of Cotton Clothes, Inc., whose management is considering extending its operations through some type of combination or acquisition with Denim Jeans Corporation. Beth could normally exercise appraisal rights if Cotton participates in
a. none of the choices.
b. a termination.
c. a sale of substantially all of the corporate assets.
d. a tender offe
