A consolidation is defined as a merger wherein:
A) One firm is completely absorbed by another firm.
B) One firm acquires the assets, but not the liabilities, of another firm.
C) Both the acquiring firm and the acquired firm cease to exist.
D) At least 80 percent of the common stock of one firm is acquired by another firm.
E) At least 51 percent of the common stock of one firm is acquired by another firm.

Question

Quizplus · Accepted Answer

In a consolidation, both the acquiring firm and the acquired firm cease to exist, and a new entity is formed. This distinguishes it from a merger, where one of the firms typically absorbs the other without the creation of a new entity.

A Consolidation Is Defined as a Merger Wherein