How Do Multinational Corporations Combine Operations

question 7

Multiple Choice

How do multinational corporations combine operations?

• A)The acquired firm is dissolved and is merged into the acquiring company.
• B)One company acquires a majority of shares of another company, but both entities continue to exist.
• C)Two or more entities dissolve their legal status and merge to create a new corporation.
• D)All of the above.

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Definitions:

Stock Issue Costs

Expenses associated with issuing new shares of stock, including underwriting, legal, and registration fees.

Contingent Consideration

An obligation of a buyer to transfer additional assets or equity interests to the seller if future events occur or conditions are met after a business combination.

Bargain Purchase

A transaction where an asset is purchased or acquired for significantly less than its estimated fair market value.

Indirect Costs

Expenses that are not directly traceable to a specific product or service but are necessary for the business's general operation.