When Two Organizations of About Equal Size Unite to Form

question 27

Multiple Choice

When two organizations of about equal size unite to form one enterprise, which of these occurs?

• A) hostile takeover
• B) merger
• C) acquisition
• D) LBO
• E) divestiture

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Definitions:

Accounts Payable

Obligations of a company to pay off short-term debts to its suppliers or creditors.

Net Working Capital

This is the difference between a company's current assets and its current liabilities, indicating its short-term financial health and ability to cover short-term obligations.

EBIT

Earnings Before Interest and Taxes, an indicator of company profit excluding costs from interest and income tax.

Net Working Capital

Net working capital is a financial metric that measures a company's ability to pay off its current liabilities with its current assets.