Which of the Following Is One of the Conditions Necessary

question 1

Multiple Choice

Which of the following is one of the conditions necessary for an amalgamation to result in a tax-free/deferred combination?

• A)At least one of the corporations must be Canadian.
• B)Fifty percent of the assets and liabilities of the old corporation must become assets and liabilities of the new corporation.
• C)The two corporations must be in a similar line of business.
• D)All of the shareholders of the old corporations must become shareholders of the new corporation.

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Definitions:

Simple Interest

Interest calculated only on the original principal and paid only at the maturity date.

GICs

Guaranteed Investment Certificates, a type of Canadian investment that offers a guaranteed rate of return over a fixed period.

Purchasing Power

The value of currency expressed by the amount of goods or services that one unit of money can buy.

Inflation Rate

The speed at which the overall price level of goods and services increases, leading to a decline in purchasing power.