A combination in which all of the combining companies are dissolved and a new firm is formed is known as a ____.
A) holding company
B) leveraged buyout
C) consolidation
D) composition

Question

Quizplus · Accepted Answer

A consolidation is a type of combination in which all of the combining companies are dissolved and a new firm is formed. A holding company is a type of combination in which one company acquires enough voting stock in another company to control its operations, but the acquired company remains a separate legal entity. A leveraged buyout is a type of combination in which a company is acquired using a large amount of borrowed money, often resulting in high levels of debt. A composition is a type of agreement between a debtor and creditor to settle outstanding debts for less than the full amount owed.

A Combination in Which All of the Combining Companies Are