Which of the Following Statements Best Describes a Bootstrap Acquisition

question 11

Multiple Choice

Which of the following statements best describes a bootstrap acquisition?

• A)The shareholder sells part of his or her stock to a purchaser and then the corporation redeems the original shareholder's remaining stock.
• B)The shareholder sells his stock in exchange for cash and debt.
• C)The shareholder exchanges his stock for stock of a different corporation.
• D)none of the above

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Definitions:

Consignment

An arrangement where goods are left with a third party to sell, but ownership remains with the supplier until the goods are sold.

Consignee

The retailer in a consigned inventory arrangement.

Retailer

A business entity that sells goods or services directly to consumers through various distribution channels to earn a profit.

Current Replacement Cost

The amount of money it would cost to replace an asset at the present time, considering its current condition.