In a True Merger,not a Consolidation,the Acquirer

question 28

Multiple Choice

In a true merger,not a consolidation,the acquirer

• A)and the target firm become a new firm with a new name.
• B)accepts the responsibility for the debts of the target firm.
• C)ceases to exist as a separate firm.
• D)obtains only the assets of the target firm.
• E)is totally absorbed by the acquired firm.

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Definitions:

Face Value

The original value of a financial instrument as stated on the certificate or contract.

Market Price

represents the current price at which an asset or service can be bought or sold in the market.

Bonds

Fixed income instruments that represent a loan made by an investor to a borrower, typically corporate or governmental.

Nominal Return

The amount of profit or loss realized from an investment without adjusting for factors like inflation.