Asked by
NavJot SiNgh
on Nov 07, 2024
Verified
Which of the following is the best definition of a merger?
A) The complete absorption of one company by another, where the acquiring firm retains its identity and the acquired firm ceases to exist as a separate entity.
B) Going-private transactions in which a large percentage of the money used to buy the stock is borrowed. Often, incumbent management is involved.
C) Typically an agreement between firms to create a separate, co-owned entity established to pursue a joint goal.
D) A targeted stock repurchase where payments are made to potential bidders to eliminate unfriendly takeover at-tempts.
E) All publicly owned stock in a firm is replaced with complete equity ownership by a private group.
Merger
The combination of two or more companies into one, where one corporation is absorbed into another or they form a new entity.
Going-Private Transactions
Financial operations in which a company's outstanding public shares are purchased, often by private equity firms, to remove it from public stock exchanges.
Joint Goal
An objective or target shared by two or more parties who are working together to achieve it.
- Gain familiarity with the foundational ideas and terminologies linked to mergers, acquisitions, divestitures, and the governance of corporations.
Verified Answer
HD
Learning Objectives
- Gain familiarity with the foundational ideas and terminologies linked to mergers, acquisitions, divestitures, and the governance of corporations.