_____ In all cases in which all of the target company's outstanding common stock is acquired,
A) A taxable event has occurred.
B) A statutory merger will result.
C) A parent-subsidiary relationship is formed.
D) A pooling of interests results.
E) None of the above.

Question

Quizplus · Accepted Answer

When all of the target company's outstanding common stock is acquired, a parent-subsidiary relationship is formed because the acquiring company becomes the parent company, and the target company becomes a subsidiary. This does not necessarily mean a taxable event has occurred, a statutory merger will result, or a pooling of interests results, as these outcomes depend on the specific structure and terms of the acquisition.

_____ in All Cases in Which All of the Target