Which of the Following Statements Is Correct with Regard to Liabilities

question 101

Multiple Choice

Which of the following statements is correct with regard to liabilities in corporate reorganizations?

• A) While in a "Type A" merger, all the liabilities of the target must be acquired; in a consolidation, only general liabilities are transferred.
• B) In a "Type G" reorganization, the target's liabilities rarely are liquidated.
• C) Liabilities are problematic for a "Type C" only when the acquiring corporation transfers other property in addition to common stock.
• D) Long-term liabilities bonds) can be exchanged tax-free in a "Type E" reorganization as long as the terms of the bonds are greater than 10 years and the interest rates are identical.

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