Some advantages of obtaining control by acquiring a controlling interest in stock include all but:
A)Negotiations are made directly with the acquiree's management.
B)The legal liability of each corporation is limited to its own assets.
C)The cost may be lower since only a controlling interest in the assets, not the total assets, is acquired.
D)Tax advantages may result from preservation of the legal entities.

Question

Some advantages of obtaining control by acquiring a controlling interest in stock include all but:​
A)​Negotiations are made directly with the acquiree's management.
B)​The legal liability of each corporation is limited to its own assets.
C)​The cost may be lower since only a controlling interest in the assets, not the total assets, is acquired.
D)​Tax advantages may result from preservation of the legal entities.

Quizplus · Accepted Answer

Negotiations for acquiring a controlling interest in stock are typically made with shareholders rather than directly with the acquiree's management. This is because acquiring a controlling interest involves purchasing shares from existing shareholders to gain control over the company.

Some Advantages of Obtaining Control by Acquiring a Controlling Interest