Ehlinger Investments announced today that it has acquired all of the assets and liabilities of Thompson Equity. The combined firm will be known as Ehlinger Investments; Thompson Equity no longer exists as a separate entity. This acquisition is best described as a:

Question

BlackTom AI · Accepted Answer

The situation describes one company absorbing another so that a single entity continues under a specified name. 
Option 1 (merger): This fits because Ehlinger Investments endures as the combined firm and Thompson Equity ceases to exist as a separate entity. A merger typically results in one surviving company incorporating or absorbing the other, often continuing under one of the original names or a chosen name, which in this case is Ehlinger Investments.
Option 2 (consolidation): In a consolidation, two or more firms dissolve to form a new, distinct entity. Since the prompt states the combined firm will be known as Ehlinger Investments (the name of an existing firm) rather than a brand-new entity, this option is inconsistent with a true consolidation.
Option 3 (tender offer): A tender offer is an offer to purchase shares from the target’s shareholders, potentially leading to ownership control, but it does not describe the complete absorption of assets and liabilities resulting in a single surviving company.
Option 4 (spinoff): A spinoff creates a new independent company by separating a portion of a parent company’s operations; the parent continues to exist. This scenario is the opposite of what’s described, where Thompson Equity disappears as a separate entity and no new independent company is formed.
Option 5 (divestiture): A divestiture involves selling off a business unit or subsidiary, not merging or absorbing it into the acquiring company. This does not align with the description of assets and liabilities being combined into a single continuing firm.

FIN331101 Homework 5

Ehlinger Investments announced today that it has acquired all of the assets and liabilities of Thompson Equity. The combined firm will be known as Ehlinger Investments; Thompson Equity no longer exists as a separate entity. This acquisition is best described as a:

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FIN*3311*01 Homework 5

Ehlinger Investments announced today that it has acquired all of the assets and liabilities of Thompson Equity. The combined firm will be known as Ehlinger Investments; Thompson Equity no longer exists as a separate entity. This acquisition is best described as a:

View Explanation

Log in for full answers

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Which of the following statement regarding cost is correct:

Under the assumptions used in cost-volume-profit analysis, as the activity increases:

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FIN331101 Homework 5