Firm A and Firm B join to create Firm AB.This is an example of:
A)A tender offer.
B)An acquisition of assets.
C)An acquisition of equity.
D)A consolidation.
E)Both B and C.

Question

Quizplus · Accepted Answer

A consolidation occurs when two or more firms combine to form a new entity, in this case, Firm AB. It differs from an acquisition of assets or equity because both firms cease to exist as separate entities and instead form a new organization. It also differs from a tender offer, which is a public offer to purchase shares of a company's stock, often with the intention of acquiring a controlling stake.

Firm a and Firm B Join to Create Firm AB