Which of the Following Statements Regarding "Type B" Reorganizations Is

question 83

Multiple Choice

Which of the following statements regarding "Type B" reorganizations is true?

• A)"Type B" reorganizations are rather complicated because a parent-subsidiary relationship is created by the transaction.This can cause problems for shareholders.
• B)The requirement that only voting stock may be used as consideration in a "Type B" reorganization by the acquiring corporation is a distinct disadvantage.
• C)The acquisition of liabilities can cause problems with a "Type B" reorganization.If the liabilities are greater than 20% of the asset value,the 80% control requirement is not met.
• D)Since the shareholders of the target are likely to have greater than a 50 percentage point ownership change,the § 382 limitation usually apply to "Type B" reorganizations.
• E)All of the above statements are true.

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Definitions:

Recession

A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.

Portfolio

A group of various financial instruments such as stocks, bonds, commodities, and cash or cash-like assets, including mutual funds and exchange-traded funds.

Portfolio Diversification

An investment strategy that involves spreading investments across different financial assets to reduce risk.

Diverse Securities

A variety of financial instruments that an investor holds, including stocks, bonds, and commodities, to reduce risk through diversification.