Final answer:
The incorrect statement about mergers is option (b), as shareholder approval percentages can vary widely rather than always being at least 50 percent. Other options describe possible scenarios during mergers or acquisitions.
Step-by-step explanation:
A corporate merger involves the combination of two previously independent firms, leading to one firm that operates under common ownership. This process can entail various outcomes and structures, depending on the nature of the merger and the strategies employed by the firms involved. It is crucial to distinguish between different types of mergers and related terms such as acquisition when considering the accuracy of statements about the process.
The statement that is NOT correct about mergers is option (b): "In most cases, at least 50 percent of the shareholders of the target and the bidding firm have to agree to the merger." While shareholder approval is often required, the specific percentage can vary greatly depending on the laws of the jurisdiction and the articles of incorporation of the firms involved. In some instances, a supermajority may be necessary, or different arrangements may be made depending on the deal's structure.
Option (a) describes a scenario where the target firm's board of directors is opposed to the merger, which can occur during a hostile takeover. Option (c) refers to the target firm ceasing to exist as an independent entity, becoming part of the acquiring firm, which is a general outcome of mergers and acquisitions. Lastly, option (d) states that a new firm is created after the merger and shareholders receive stock in this new entity, which describes a particular kind of merger known as a consolidation.