Which of the Following Statements Is CORRECT

question 3

Multiple Choice

Which of the following statements is CORRECT?

• A) The balance sheet for a given year, say 2008, is designed to give us an idea of what happened to the firm during that year.
• B) The balance sheet for a given year, say 2008, tells us how much money the company earned during that year.
• C) The difference between the total assets reported on the balance sheet and the debts reported on this statement tells us the current market value of the stockholders' equity, assuming the statements are prepared in accordance with generally accepted accounting principles (GAAP).
• D) For most companies, the market value of the stock equals the book value of the stock as reported on the balance sheet.
• E) A typical industrial company's balance sheet lists the firm's assets that will be converted to cash first, and then goes on down to list the firm's longest lived assets last.

---

Definitions:

Merger

A merger is the combination of two or more companies into a single entity, often to achieve greater efficiencies and market share.

Clayton Act

A U.S. antitrust law, passed in 1914, aimed at preventing anticompetitive practices and monopolies by regulating specific business activities.

Anticompetitive Effect

Refers to actions that negatively affect competition in a market, including practices like monopoly, price fixing or others that hinder free competition.

Vertical Mergers

A combination of two or more companies involved in different stages of the supply chain process for a specific product or service.