Firm A and Firm B join to create Firm AB.This is an example of:
A)a tender offer.
B)an acquisition of assets.
C)an acquisition of stock.
D)a consolidation.
E)Both B and C.

Question

Quizplus · Accepted Answer

A consolidation occurs when two companies combine to form a new entity, which is what is happening with Firm A and Firm B creating Firm AB. A tender offer involves one company offering to buy shares of stock from another company's shareholders, while an acquisition of assets involves one company purchasing certain assets from another company. An acquisition of stock involves one company purchasing a controlling stake in another company by buying their shares of stock. None of these options accurately describe the scenario given. Therefore, the correct answer is D.

Firm a and Firm B Join to Create Firm AB