Which of the Following Is Generally False When a Consolidation

question 66

Multiple Choice

Which of the following is generally false when a consolidation occurs?

• A)The consolidated entity obtains the original corporations' assets.
• B)The consolidated entity takes on the rights of the original companies.
• C)The new corporation has independent legal status.
• D)The consolidated entity assumes the debts of the original corporations.
• E)The original corporations continue to exist legally.

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Definitions:

Coupon Payments

Regular interest payments made to bondholders during the lifetime of the bond.

Floating Rate Bonds

Bonds with interest rates that adjust periodically based on a reference rate.

Coupon Rate

The interest rate stated on a bond or other fixed-income security, expressed as a percentage of its face value, that the issuer pays to the bondholder annually.

Interest Rate Risk

The potential loss in value of an investment due to a change in interest rates.