11 Which one of the following statements correctly applies t

11. Which one of the following statements correctly applies to a legally defined merger? a. The acquiring firm retains its identity and absorbs only the assets of the acquired firm. b. The acquired firm is completely absorbed and ceases to exist as a separate legal entity c. A new firm is created which includes all the assets and liabilities of the acquiring firm plus the assets only of the acquired firm. d. A new firm is created from the assets and liabilities of both the acquiring and acquired firms. e. A merger reclassifies the acquired firm into a new entity which becomes a subsidiary of the acquiring firm. 12. With a merger, the individual assets of: a. the acquired firm must be retitled to the name of the acquiring firm. b. the acquiring firm must be retitled to the name of the acquired firm. c. both the acquiring and the acquired firm must be retitled to the new firm\'s name. d. both the acquiring and the acquired firm\'s assets must be retitled to the firm\'s joint name. e. neither firm have to be retitled. 13. In a merger the: a. legal status of both the acquiring firm and the target firm is terminated. b. acquiring firm retains its name and legal status. c. acquiring firm acquires the assets but not the liabilities of the target firm. d-stockholders of the target firm have little, if any, say as to whether or not the merger occurs. e. target firm continues to exist as a subsidiary of the acquiring firm

Solution

11. b is correct

In a legally defined merger the acquired firm can not exist on its own and is completely absorbed by acquiring firm.

12. a is correct

The assets of acquired firm would retain the name of acquiring firm and thus would retitled to the name of acquiring firm.

13. b is correct

The acquiring firm does not have to exit and thus it retains its layak status and name.