Which of the following is an example of a merger?
A) Brown Electronics and Kelvin Data Systems form a new company,and Brown and Kelvin cease to exist.
B) Brown Electronics buys Kelvin Data Systems and continues to operate as Brown Electronics.
C) Brown Electronics buys Kelvin Data Systems,and Kelvin operates as a subsidiary of Brown.
D) Brown completes a hostile takeover of Kelvin.
E) None of these choices

Question

Quizplus · Accepted Answer

In a merger, two companies combine to form a new entity, and the original companies cease to exist. This is exactly what happens in choice A, where Brown Electronics and Kelvin Data Systems form a new company, and both original companies cease to exist.

Which of the Following Is an Example of a Merger