The Reduction of Risk Resulting from Combining Firms with Differing

question 28

Multiple Choice

The reduction of risk resulting from combining firms with differing seasonal or cyclical patterns ofsales or earnings is a key benefit of

• A) vertical merger.
• B) congeneric merger.
• C) conglomerate merger.
• D) horizontal merger.

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Definitions:

Rights to Collateral

Legal entitlements of a secured creditor to seize and sell the collateral if the debtor fails to fulfill the obligations of the loan or debt agreement.

Loan Due

The date by which a borrower is expected to repay the borrowed amount in full to the lender.

Rights in Bankruptcy

Legal protections and claims a debtor or creditor has during the bankruptcy process, including claims to assets and discharge of debts.

Homestead Exemption

A legal provision that protects a portion of a homeowner's principal residence from creditors and reduces property tax.