A Company Wishes to Acquire Control of B Company as Cheaply

question 16

Multiple Choice

A Company wishes to acquire control of B Company as cheaply as possible.For economic reasons,a consultant recommended that A Inc do this through a purchase of assets,rather than a purchase of shares.Which of the following statements regarding the above scenario is correct?

• A)A Inc must purchase all of B's assets and liabilities.
• B)A only needs to acquire control of B's net assets.
• C)A only needs to acquire control of B's fixed assets.
• D)The consideration given by A must exceed 50% of the Fair Market Value of B's Net Assets.

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Definitions:

Endoplasmic Reticulum

A network of membranes within a cell, involved in protein and lipid synthesis.

Golgi Bodies

Membrane-bound organelles in eukaryotic cells that process, sort, and package proteins and lipids for transport.

Modification

A change or alteration, usually to improve something or to adjust it to different conditions.

Sugar Metabolism

The series of biochemical processes by which the body converts sugars like glucose into usable energy.