Fact Pattern 31-2 Dynamo Corporation combines its assets and liabilities with those of Energy Company to form Fuel Inc. Dynamo and Energy cease to exist.
Refer to Fact Pattern 31-2. With respect to the assets of Dynamo and Energy, Fuel Inc. acquires
A) none of the assets.
B) only those assets acquired after the combination was proposed.
C) an amount of assets equal to the ratio of the firms' pre-merger market values.
D) all of the assets of both companies.

Question

Quizplus · Accepted Answer

Fuel Inc. acquires all of the assets of both Dynamo Corporation and Energy Company because the combination described is a merger, resulting in the formation of a new entity, Fuel Inc., which takes over all assets and liabilities of the merging companies.

Fact Pattern 31-2 Dynamo Corporation Combines Its Assets and Liabilities