Which of the Following Is Not a Financial Motive but Rather

question 8

Multiple Choice

Which of the following is not a financial motive but rather an operating motive for merger and consolidation?

• A) The portfolio diversification effect.
• B) Tax-loss carry-forward.
• C) Greater financing capability.
• D) Desire for greater size.

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Definitions:

Option Contract

An agreement providing the buyer the right, but not the obligation, to buy or sell an asset at a predetermined price within a specific timeframe.

Consideration

An item of worth traded between individuals in a contract to render the agreement enforceable by law.

Final Decision

A conclusive determination or resolution in a process or dispute, often implying that no further discussion or appeal is anticipated.

Preexisting-Duty Rule

A rule in contract law stating that an agreement to do what one is already legally obligated to do does not constitute valid consideration for a new contract.