Which One of the Following Statements Accurately Describes a Merger

question 15

Multiple Choice

Which one of the following statements accurately describes a merger?

• A) A merger transforms the target firm into a new entity which necessarily becomes a subsidiary of the acquiring firm
• B) A new firm is created from the assets and liabilities of the acquirer and target firms
• C) The acquiring firm absorbs only the assets of the target firm
• D) The target firm is absorbed entirely into the acquiring firm and ceases to exist as a separate legal entity.
• E) A new firm is created holding the assets and liabilities of the target firm and its former assets only.

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Definitions:

Oxidation Number

A number assigned to an element in chemical combination which represents the number of electrons lost or gained by an atom of that element in the compound.

Compound

A substance made up of atoms of two or more different elements chemically bonded together.

Oxidation Number

A number that represents the total number of electrons an atom either gains or loses in order to form a chemical bond with another atom.

Ca

Chemical symbol for Calcium, a reactive, soft metallic element that is a member of the alkaline earth metals.