A New Company Financed with Funds from Two Existing Firms

question 179

Multiple Choice

A new company financed with funds from two existing firms for the purpose of working together on a project is called a(n) :

• A) Standstill firm.
• B) Conglomerate.
• C) Consolidation.
• D) Joint venture.
• E) Acquisition.

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Definitions:

Equity

The ownership interest held by shareholders in a corporation, represented by their shares of stock.

Proportional

A relationship between two quantities where they increase or decrease at the same rate.

Tax Collection

The process performed by governments or authorized agencies to collect taxes from individuals, corporations, and other entities to fund public expenditures.

Administrative Costs

The resources used (which is a cost) by government to collect the tax, and by taxpayers to pay it as well as to evade it, over and above the amount of the tax.