There Are Several Fundamental Differences Between Defined-Benefit Plans and Defined-Contribution

question 33

Multiple Choice

There are several fundamental differences between defined-benefit plans and defined-contribution plans. In the defined-benefit plan, the plan sponsor does which of the following?

• A) The sponsor does not guarantee the retirement benefit
• B) The sponsor does not make the investment choices
• C) The sponsor bears the investment risk if the investments earn enough to fund the guaranteed retirement benefits.
• D) The sponsor bears the investment risk if the investments do not earn enough to fund the guaranteed retirement benefits.

Acknowledge the financial and operational benefits of mergers, including economies of scale and expense reduction through reduced headcount.

Understand the reasons and motivations behind mergers and acquisitions (M&A).

Identify different types of mergers and acquisitions.

Recognize the potential benefits and challenges associated with M&As.

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Definitions:

Common Share

Common share represents equity ownership in a corporation, giving shareholders voting rights and a portion of the profits through dividends.

Par Value

Par value refers to the nominal or face value of a bond, stock, or coupon as stated by the issuer, and may have legal implications for capital stock.

Common Stock

A type of equity security that represents ownership in a corporation and entitles its holders to vote on corporate matters and receive dividends.

Journal Entries

The records of financial transactions in the accounting system that document the effects on accounts in a double-entry bookkeeping system.