Which of the Following Statements Best Describes the Continuity of Interest

question 96

Multiple Choice

Which of the following statements best describes the continuity of interest principle as it applies to a tax-deferred acquisition?

• A) Continuity of interest requires shareholders in the aggregate to receive at least 80 percent of the consideration received in equity of the acquirer.
• B) Continuity of interest requires each shareholder to receive at least 80 percent of the consideration received in equity of the acquirer.
• C) Continuity of interest requires each shareholder to receive at least 40 percent of the consideration received in equity of the acquirer.
• D) Continuity of interest requires shareholders in the aggregate to receive at least 40 percent of the consideration received in equity of the acquirer.

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Definitions:

Midpoint Formula

A method used in geometry to find the midpoint of a line segment between two points by averaging the x and y coordinates.

Demand

The consumer's willingness and ability to purchase goods or services at various price points at a given time.

Parallel Demand Curves

Graphical representations of the demand for two or more goods that do not intersect, indicating no direct substitution effect between them.

Elastic

Describes a situation in economics where the demand or supply for a good or service significantly changes in response to changes in price.