Which of the Following Is Not True About a Merger

question 39

Multiple Choice

Which of the following is not true about a merger of two not-for-profit entities?

• A) The two entities will continue to legally exist but there will be a new governing board.
• B) Neither entity is considered to be acquired.
• C) Identifiable assets and liabilities are not adjusted to their fair values at the date of the merger.
• D) The two entities will together form an entirely new entity with a new governing board.
• E) There will be no acquisition value or goodwill determination.

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Definitions:

Shares Outstanding

The total number of a company's shares that are currently owned by all its shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders.

Common Stock

A form of corporate equity ownership, a type of security representing an ownership share in a corporation.

Paid-In Capital

Paid-In Capital is the amount of money investors have paid to a company in exchange for shares of its stock, reflecting the additional capital contributed by shareholders over the par value of the shares.

Par Value

The face value of a stock or bond as stated by the issuing company, which does not necessarily match the market value.