Which One of the Following Statements Correctly Applies to a Legally

question 40

Multiple Choice

Which one of the following statements correctly applies to a legally defined merger?

• A)The acquiring firm retains its identity and absorbs only the assets of the acquired firm.
• B)The acquired firm is completely absorbed and ceases to exist as a separate legal entity.
• C)A new firm is created which includes all the assets and liabilities of the acquiring firm plus the assets only of the acquired firm.
• D)A new firm is created from the assets and liabilities of both the acquiring and acquired firms.
• E)A merger reclassifies the acquired firm into a new entity which becomes a subsidiary of the acquiring firm.

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Definitions:

Market System

Investment, production, and distribution closely follow supply and demand directives in this economic system, which allows for the free fluctuation of goods and services prices within an unrestricted price system.

Total Revenues

The overall income received by a firm from selling its goods or services, calculated as the price of the good multiplied by the quantity sold.

Total Costs

The sum of all costs associated with producing a good or service, including both fixed and variable costs.

Industry Expansion

The growth or increase in size and operations of an industry due to higher demand, technological advancements, or other factors.