Which of the Following Examples Accurately Describes a Difference in the Types

question 68

Multiple Choice

Which of the following examples accurately describes a difference in the types of business combinations?

• A) A statutory merger can only be effected through an asset acquisition while a statutory consolidation can only be effected through a capital stock acquisition.
• B) A statutory merger can only be effected through a capital stock acquisition while a statutory consolidation can only be effected through an asset acquisition.
• C) A statutory merger requires the dissolution of the acquired company while a statutory consolidation requires dissolution of the companies involved in the combination following the transfer of assets or stock to a newly formed entity.
• D) A statutory consolidation requires dissolution of the acquired company while a statutory merger does not require dissolution.
• E) Both a statutory merger and a statutory consolidation can only be effected through an asset acquisition but only a statutory consolidation requires dissolution of the acquired company.

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Definitions:

Short Run

A period in economics during which at least one input, such as plant size or capital equipment, is fixed and cannot be changed.

Market Price

Market price is the current price at which a good or service can be bought or sold in the marketplace.

Shut-Down Price

The price point at which a firm's total revenue equals its variable costs, below which the firm should cease operations to minimize losses.

Variable Costs

Costs that vary directly with the level of production or output.