Which One of the Following Statements Accurately Describes a Merger

question 15

Multiple Choice

Which one of the following statements accurately describes a merger?

• A) A merger transforms the target firm into a new entity which necessarily becomes a subsidiary of the acquiring firm
• B) A new firm is created from the assets and liabilities of the acquirer and target firms
• C) The acquiring firm absorbs only the assets of the target firm
• D) The target firm is absorbed entirely into the acquiring firm and ceases to exist as a separate legal entity.
• E) A new firm is created holding the assets and liabilities of the target firm and its former assets only.

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Definitions:

Test Results

The outcomes obtained from administering tests, which can be used to evaluate performance, knowledge, skills, or conditions.

Correlation Coefficient

A numerical index that reflects the degree of linear relationship between two variables, ranging from -1 to +1.

Variable

An element, feature, or factor that is likely to vary or change; in research, it is something that is measured or manipulated to assess its effects on an outcome.

Statistic

A numerical value that describes or summarizes some aspect of a set of data.