Which one of the following statements correctly applies to a merger?
A) The acquiring firm does not have to seek approval for the merger from its shareholders.
B) The shareholders of the target firm must approve the merger.
C) The acquiring firm will acquire the assets but not the debt of the target firm.
D) The merged firm will have a new company name.
E) The titles to individual assets of the target firm must be transferred into the acquiring firm's name.

Question

Quizplus · Accepted Answer

In a merger, the target firm's shareholders must approve the merger before it can go through. The acquiring firm may or may not need approval from its own shareholders, depending on the specifics of the merger agreement. The acquiring firm may acquire both the assets and debt of the target firm, and the merged firm may or may not have a new company name. The titles to individual assets of the target firm will be transferred to the acquiring firm as part of the merger.

Which One of the Following Statements Correctly Applies to a Merger