Which of the following is true only of a consolidation?
A) More than two firms are involved in the combination
B) One party to the combination disappears
C) All parties to the combination disappear
D) The entity resulting from the combination assumes ownership of the assets and liabilities of the acquiring firm only.
E) One company becomes a wholly owned subsidiary of the other.

Question

Quizplus · Accepted Answer

In a consolidation, all original parties involved in the combination disappear, and a completely new entity is formed to take over the businesses of the combining parties. This distinguishes it from other forms of mergers or acquisitions where one of the original companies may remain in existence.

Which of the Following Is True Only of a Consolidation