Asked by Aidan Durham on Jun 22, 2024
Verified
Dynamo Corporation combines its assets and liabilities with those of Energy Company to form Fuel Inc. Dynamo and Energy cease to exist. The formation of Fuel Inc. is
A) a takeover.
B) a consolidation.
C) a liquidation.
D) a share exchange.
Consolidation
The process of combining two or more entities into a single entity, often with the goal of improving efficiency or reducing costs.
Assets and Liabilities
The items a company owns (assets) and the debts it owes (liabilities), fundamental components of a company's financial health.
- Acquire knowledge on the essential differences between mergers, consolidations, takeovers, and share exchanges.
- Comprehend the legal demarcations between enduring and dissolving entities within mergers and consolidations.
Verified Answer
MM
Mayte MoranJun 24, 2024
Final Answer :
B
Explanation :
When two companies combine their assets and liabilities to form a new company, and the original companies cease to exist, this process is known as consolidation.
Learning Objectives
- Acquire knowledge on the essential differences between mergers, consolidations, takeovers, and share exchanges.
- Comprehend the legal demarcations between enduring and dissolving entities within mergers and consolidations.
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