Entity a and Entity B Agree to Merge

question 7

Multiple Choice

Entity A and Entity B agree to merge.The capital structure of each entity is:
Entity A - 100 ordinary shares
Entity B - 60 ordinary shares
Entity A issues 2.5 shares in exchange for each ordinary share of Entity B.All of Entity B's shareholders exchange their shares for Entity A shares.
Which of the following statement is correct?

• A)Entity A is both the parent and the acquirer in the transaction.
• B)Entity B is both the parent and the acquirer in the transaction.
• C)Entity A is the parent and Entity B is the acquirer in the transaction.
• D)Entity B is the parent and Entity A is the acquirer in the transaction.

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Definitions:

Scrotum

The pouch of skin containing the testicles in male mammals.

Glans Penis

The rounded head (or tip) of the penis.

Prepuce

The fold of skin that covers the glans of the penis in males or surrounds the clitoral glans in females, also known as foreskin in males.

Ovary

A female reproductive organ in which oocytes (eggs) are produced, and hormones like estrogen and progesterone are secreted.