Which one of the following types of mergers is most likely to lead to diversification benefits?
A) A horizontal merger
B) A vertical merger
C) A tax-free exchange
D) A conglomerate merger

Question

Quizplus · Accepted Answer

A conglomerate merger involves the combination of companies from different industries or sectors, which can lead to diversification benefits as the merged entity can benefit from reduced risk through exposure to multiple industries or sectors. Horizontal and vertical mergers typically involve companies from the same or similar industries, and tax-free exchanges do not necessarily lead to diversification benefits.

Which One of the Following Types of Mergers Is Most