Which of the Following About an Asset Purchase Merger Transaction

question 55

Multiple Choice

Which of the following about an asset purchase merger transaction is (are) correct?
I. Only the assets are purchased.
II. The buying firm receives 100% of the assets and incurs only 50% of the liabilities.

• A) Only statement I is correct.
• B) Only statement II is correct.
• C) Both statements I and II are correct.
• D) Neither statement I nor II is correct.

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Definitions:

Quarterly

Pertaining to or occurring every quarter, a three-month period, often used in financial and business reporting.

Annuities

Financial products that provide a series of payments over time, often used for retirement savings or income.

Compounded Annually

The process of adding the accumulated interest back to the principal sum at the end of each year, so that interest is earned on interest from that point forward.

Accountant

An accountant is a professional who performs accounting functions such as audits or financial statement analysis according to prescribed methods.