CFA Practice Question

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CFA Practice Question

If two companies are approximately of a similar size, a ______ is the most likely merger form.
A. Statutory merger.
B. Acquisition.
C. Consolidation.
Explanation: Consolidation is common in mergers where both companies are approximately the same size.

User Contributed Comments 1

User Comment
krisscfa This topic is discussed under "Forms of Business Integration"

1. Statutory Merger : Acquiring company acquires all of the Target's assets and liabilities. Target ceases to exist thereafter

2.Subsidiary Merger : Target Company becomes subsidiary of the acquirer. Subsidiary mergers typically occur when the target has a well known brand tht acquirer wants to retain
Eg : P&G buying Gillette

3. Consolidation : Both companies combine to form a new company. Consolidations are common in mergers when both companies are of similar size
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