Perez Co. acquired Roo Co. in a business combination. Roo issued new shares to Perez's shareholders in exchange for their outstanding shares. What type of share exchange is this?
A)Direct exchange
B)Indirect exchange
C)Hostile takeover
D)Reverse takeover

Question

Quizplus · Accepted Answer

This is a reverse takeover, where the company being acquired (Roo Co.) issues new shares to the shareholders of the acquiring company (Perez Co.), effectively taking over the acquiring company.

Perez Co Acquired Roo Co