In a Business Combination,which of the Following Will Occur

question 17

Multiple Choice

In a business combination,which of the following will occur?

• A)All identifiable assets and liabilities are recorded at fair value at the date of acquisition.
• B)All identifiable assets and liabilities are recorded at book value at the date of acquisition.
• C)Goodwill is recorded if the fair value of the net assets acquired exceeds the book value of the net assets acquired.
• D)The Sarbanes-Oxley Act requires firms to report material aggregate amounts of goodwill as a separate balance sheet line item.

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Definitions:

Annual Interest

The interest amount that is earned or paid on a financial instrument in one calendar year.

Tax Rate

The percentage at which an individual or corporation is taxed on their income or property.

Bond Issue

A financing method for companies or governments to raise capital by issuing debt securities to investors, which are payable over a specified term.

Unlevered Firm

A company that operates without using borrowed money, relying solely on its own equity for financing.