Which One of the Following Is a Disadvantage of a Merger

question 86

Multiple Choice

Which one of the following is a disadvantage of a merger?

• A) Transferring the title to all the target firm's assets
• B) Disbanding the operations of the target firm
• C) Hiring an underwriter to distribute the IPO shares
• D) Incurring the costs of creating a new legal entity
• E) Seeking approval of the shareholders of both firms

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Definitions:

Quantity Supplied

The aggregate quantity of a product or service that suppliers are prepared and capable of selling at a particular price during a defined time frame.

Shortage

A condition where the quantity demanded of a good exceeds the quantity supplied at the market price.

Equilibrium Price

The price at which the quantity of goods supplied is equal to the quantity of goods demanded in the market.

Equilibrium Quantity

The amount of products or services that are provided and requested at the balance price.