The Joining of a Firm with Another to Which It

question 39

Multiple Choice

The joining of a firm with another to which it sells an output or from which it buys an input is known as

• A) a conglomerate merger.
• B) a horizontal merger.
• C) a vertical merger.
• D) economies to scale.

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Definitions:

Income Statement

A financial statement that reports a company's financial performance over a specific period, illustrating revenues, expenses, and net income or loss.

Interest-Bearing Note

A debt instrument that pays interest to the lender over the term of the loan.

Put Option

A financial contract giving the option holder the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified time.

Fair Value Hedge

A hedge that protects against changes in the fair value of assets, liabilities, or firm commitments through the use of a derivative.