Company a Wishes to Acquire Control of Company B as Cheaply

question 46

Multiple Choice

Company A wishes to acquire control of Company B as cheaply as possible. For economic reasons, a consultant recommended that if Company A do this through purchase of assets, rather than purchase of shares. Which of the following statements regarding the above scenario is correct?

• A) A must purchase all of B's assets and liabilities.
• B) A only needs to acquire control of B's net assets.
• C) A only needs to acquire control of B's fixed assets.
• D) The consideration given by A must exceed 50% of the Fair Market Value of B's Net Assets.

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Definitions:

Nonverbal Communication

The transmission of messages or signals through a non-linguistic means, such as body language, facial expressions, gestures, and posture.

Cathartic Release

A psychological concept where expressing or letting out emotions is believed to provide relief from emotional distress.

Disrespectful

Pertains to showing a lack of respect or courtesy towards someone or something, often resulting in hurt feelings or offense.

Whiny

Characterized by a complaining or grumbling tone or behavior, often perceived as irritating.