Xanadu Company wants to acquire Yazoo Corporation.Xanadu gives some of its own Xanadu stock to each of the shareholders of Yazoo in exchange for the Yazoo stock.Once this is done,Xanadu owns all of the Yazoo stock,but the company does nothing further with the Yazoo stock.This transaction is called a:

Question

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A share exchange is a transaction where one company's stock is exchanged for another company's stock. In this scenario, Xanadu Company is giving its own stock to acquire Yazoo Corporation's stock in exchange. It is not a merger or consolidation because Xanadu does not merge or combine with Yazoo, nor does it buy any of Yazoo's assets. It is not a purchase of assets because Xanadu is not buying any of Yazoo's assets, just their stock. Finally, it is not a hostile takeover because it is not a hostile acquisition of a company's stock by purchasing it without the approval of its board of directors or shareholders.

Xanadu Company Wants to Acquire Yazoo Corporation