After an exchange of shares in a business combination, each group of shareholders held 50% of the voting rights. Which of the following factors would be the strongest to be considered in determining the acquirer?
A)Composition of the board of directors.
B)If there are material transactions between the combining companies.
C)Which company initiated the combination.
D)Head office location.

Question

Quizplus · Accepted Answer

The composition of the board of directors is a strong indicator of control and thus helps in determining the acquirer in a business combination. It reflects which group of shareholders has the ability to influence the operating and financial policies of the combined entity.

After an Exchange of Shares in a Business Combination, Each