A Merger Between Firms That Are in the Same Industry

question 116

Multiple Choice

A merger between firms that are in the same industry is called a

• A) conglomerate merger.
• B) horizontal merger.
• C) vertical merger.
• D) none of the above.

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Definitions:

Conversion Provision

A clause in a security or loan that allows the holder to convert into a different security, typically common stock, under certain conditions.

Callable Preferred Stock

Callable Preferred Stock is a type of preferred stock that gives the issuer the right to redeem the stock at a predetermined price after a specified date.

Recall Price

The price at which a company can recall its shares or bonds before their maturity date, usually at a premium.

Retained Earnings

The cumulative amount of net income earned by a company that is retained and not distributed to shareholders as dividends.