A Transaction in Which Two Corporations Combine Such That Afterwards

question 42

Multiple Choice

A transaction in which two corporations combine such that afterwards only one of them still exists and owns all the assets previously owned by either corporation is called a:

• A) merger
• B) tender offer
• C) purchase of assets
• D) share exchange

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Definitions:

Physical Capital

Tangible assets such as buildings, machinery, and equipment used in the production of goods and services.

Natural Resources

Raw materials and environmental assets that occur naturally on the planet, such as water, minerals, and forests, which can be utilized for economic gain.

Production Function

An equation or model that describes the relationship between inputs used in production and the output of goods or services.

Catch-Up Effect

The theory that poorer economies will tend to grow at a faster rate than wealthier economies and thus converge in terms of income per capita over time.