One of the Most Basic Reasons for a Merger Is

question 73

Multiple Choice

One of the most basic reasons for a merger is:

• A) revenue enhancements in the hopes that net losses may decrease.
• B) increased competition.
• C) employee benefits.
• D) cost reductions.
• E) to keep lawyers and accountants employed.

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Definitions:

Capital Stock

The total amount of shares that a corporation is authorized to issue to shareholders, representing the primary source of equity financing for the company.

Cumulative Preferred Stock

A type of preferred stock that entitles the shareholder to receive dividends that were missed in the past before any dividends are paid to common stock shareholders.

Capital Stock

The total amount of shares that a corporation is authorized to issue as stated in its articles of incorporation.

Dividend

A portion of a company's earnings distributed to its shareholders.