A Merger Between an Automobile Manufacturer and a Maker of Automobile

question 102

Multiple Choice

A merger between an automobile manufacturer and a maker of automobile tires is an example of a

• A) conglomerate merger.
• B) horizontal merger.
• C) vertical merger.
• D) tying contract.

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Definitions:

Legal Capital

The minimum amount of capital that a company must maintain as required by law, often to protect creditors.

Assigned

Attributed or designated to a particular task, resource, or responsibility within an organization or process.

Cash Dividend

A payment made by a company out of its earnings to its shareholders, typically in the form of cash.

Retained Earnings

Retained earnings are the portion of a company's net income that is kept within the company instead of being paid out to shareholders as dividends, used for reinvestment.