Market Company Exchanges Some of Its Shares for Some of the Shares

question 32

Multiple Choice

Market Company exchanges some of its shares for some of the shares of Niche Corporation. On the exchange of shares between Market and Niche

• A)both companies continue to exist.
• B)both companies cease to exist.
• C)only Market survives.
• D)only Niche survives.

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Definitions:

Initial Public Offering (IPO)

A company’s first equity issue made available to the public. Also an unseasoned new issue.

Publicly Traded

Refers to companies whose shares are bought and sold on public stock exchanges.

Venture Capitalists

Investors who provide capital to start-up companies and small businesses with perceived long-term growth potential.

Pension Funds

Pooled monetary contributions from different individuals or entities to invest in securities, designed to generate future retirement income for participants.