Asked by Chae-Lynn Normore on Jul 10, 2024
Verified
A combination in which all of the combining companies are dissolved and a new firm is formed is a:
A) holding company.
B) leveraged buyout.
C) consolidation.
D) composition.
Consolidation
The process of combining multiple accounts or businesses into a single entity, often for the purpose of simplifying financial statements or achieving operational efficiencies.
Holding Company
A company that owns other companies. A parent company.
Leveraged Buyout
A financial transaction where a company is acquired primarily with borrowed funds, often with the assets of the company being acquired used as collateral for the loans.
- Discern diverse categories of mergers and fathom their attributes and repercussions.
Verified Answer
AS
Anmol SheikhJul 17, 2024
Final Answer :
C
Explanation :
A consolidation occurs when all of the combining companies are dissolved and a new firm is formed. A holding company is a type of business organization that owns stock in other companies, but does not necessarily dissolve them. A leveraged buyout is a type of acquisition in which a large amount of debt is used to finance the purchase of a company. A composition is a legal agreement between a debtor and creditor to reform payment terms for outstanding debts.
Learning Objectives
- Discern diverse categories of mergers and fathom their attributes and repercussions.