Which of the Following Statements Best Describes a Bootstrap Acquisition

question 63

Multiple Choice

Which of the following statements best describes a bootstrap acquisition?

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

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Definitions:

Initial Endowment

The initial allocation of resources, money, or goods that an individual, institution, or country possesses.

Pareto Optimal

An allocation of resources from which it is impossible to reallocate to make any one individual better off without making at least one individual worse off.

Utility Function

A mathematical representation used in economics to model the satisfaction or happiness a consumer derives from consuming goods and services.

Edgeworth Box

A diagram used in microeconomics to show the distribution of resources and the optimality of trade-offs between two agents in an economy.