A Merger in Which an Entirely New Firm Is Created

question 11

Multiple Choice

A merger in which an entirely new firm is created and both the acquired and acquiring firms cease to exist is called a:

• A)divestiture.
• B)consolidation.
• C)tender offer.
• D)spinoff.
• E)conglomeration.

---

Definitions:

Acquisition

The process of obtaining control of another company, either through purchase or merger.

Dividend Income

Income received from owning shares in a company, typically distributed from the company's earnings.

Bonds

Financial instruments representing a loan made by an investor to a borrower, typically corporate or governmental, with terms specifying interest payments and the return of principal at maturity.

Par Value

The nominal or face value of a security or stock, which is stated in the corporate charter.