If a Company That Drilled for and Produced Oil Acquired

question 152

Multiple Choice

If a company that drilled for and produced oil acquired a firm which refined oil into gasoline, this would be referred to as a

• A) horizontal merger.
• B) vertical merger.
• C) conglomerate merger.
• D) reverse merger.

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Definitions:

Times Interest Earned

A metric used to measure a company's ability to meet its debt obligations, calculated by dividing earnings before interest and taxes (EBIT) by interest expenses.

Interest Expense

The cost incurred by an entity for borrowed funds over a specific period, including loans, bonds, or lines of credit.

Redeemable Bonds

Bonds that can be returned to the issuing entity before maturity for a predetermined price.