Cassius Ltd and Brutus Ltd Agreed to Merge by Forming

question 9

Multiple Choice

Cassius Ltd and Brutus Ltd agreed to merge by forming another company,Casca Ltd,which acquired all of the share capital of the two companies in a share exchange.Cassius Ltd was a much larger company than Brutus Ltd with several large equity stakeholders so that the Board of Cassius Ltd emerged from the business combination with the power to dominate the operating and financial policies of the merged entity.Based on these facts:

• A) Casca Ltd must be the acquiring entity since it acquired the share capital of Cassius Ltd and Brutus Ltd.
• B) Cassius Ltd is the acquiring entity since its management emerges as the dominant power in the merged entity.
• C) Neither Cassius Ltd nor Brutus Ltd can be the acquiring entity since their equity securities have been acquired by Casca Ltd.
• D) None of the above.

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Definitions:

Rate Regulation

The governmental or regulatory authority's control over the pricing of certain services and products.

Public Utility Managers

Individuals responsible for overseeing the operations and maintenance of public utilities, ensuring services like water, gas, and electricity are provided efficiently.

Asset Base

The total value of all assets owned by an individual or entity, which can include cash, investments, property, and other tangible and intangible items.

Capital Adequacy Ratio

A measure used by banks to ensure they have enough capital to cover their risks and continue operating in case of losses.