What Is a Vertical Merger

question 45

Multiple Choice

What is a vertical merger?

• A) a merger between firms in totally unrelated businesses
• B) a merger that integrates the operations of a supplier and a customer
• C) a merger between two companies in similar fields whose sales do not overlap
• D) a merger between two or more companies that compete in the same business and geographical market

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Definitions:

Impairment Loss

A reduction in the recoverable value of an asset to below its carrying amount, resulting in a charge against income.

Consolidation Worksheet

A tool used in the preparation of consolidated financial statements that helps in combining and adjusting the financial information of parent and subsidiary companies.

Group Formation

The process of creating a collective of companies under a parent company for operational, tax, or strategic purposes.