An Example of a Difference in Types of Business Combination

question 81

Multiple Choice

An example of a difference in types of business combination is:

• A) A statutory merger can only be effected by an asset acquisition while a statutory consolidation can only be effected by a capital stock acquisition.
• B) A statutory merger can only be effected by a capital stock acquisition while a statutory consolidation can only be effected by an asset acquisition.
• C) A statutory merger requires dissolution of the acquired company while a statutory consolidation does not require dissolution.
• D) A statutory consolidation requires dissolution of the acquired company while a statutory merger does not require dissolution.
• E) Both a statutory merger and a statutory consolidation can only be effected by an asset acquisition but only a statutory consolidation requires dissolution of the acquired company.

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Definitions:

Income Effect

The change in consumption that results from a change in real income or purchasing power.

Demand Function

A mathematical model that describes the quantity of a good or service demanded at various prices, holding other factors constant.

Substitution Effect

The substitution effect is a concept in economics that describes how consumers change their consumption patterns in response to changes in the prices of goods, opting for cheaper alternatives when prices increase.

Income

Money received, especially on a regular basis, for work, through investments, or from any other source.