Which of the Following Statements Does Not Describe a Requirement

question 44

Multiple Choice

Which of the following statements does not describe a requirement that must be met in a tax-deferred forward triangular merger?

• A) The continuity of business enterprise test must be met with respect to the target corporation.
• B) The acquirer must hold substantially all of the target corporation's properties after the merger.
• C) The target corporation shareholders must receive voting stock in the acquiring corporation.
• D) The 40 percent continuity of interest test must be met with respect to the stock transferred from the acquisition corporation to the target corporation shareholders.

---

Definitions:

Long-Run Equilibrium

a state in which all factors of production can be adjusted, and all firms in the market are making zero economic profits, reflecting a situation of perfect competition.

Marginal Cost

The change in total cost that arises when the quantity produced is incremented by one unit; essentially, the cost of producing one more unit of a good.

Product-Variety Externality

An economic effect where an individual's consumption choices can lead to an increase in the variety of products available, potentially benefiting other consumers.