Asked by
Wendy Licona
on Nov 07, 2024
Verified
Which of the following is the best definition of a going-private transaction?
A) The complete absorption of one company by another, where the acquiring firm retains its identity and the acquired firm ceases to exist as a separate entity.
B) Going-private transactions in which a large percentage of the money used to buy the stock is borrowed. Often, incumbent management is involved.
C) Typically an agreement between firms to create a separate, co-owned entity established to pursue a joint goal.
D) A targeted stock repurchase where payments are made to potential bidders to eliminate unfriendly takeover at-tempts.
E) All publicly owned stock in a firm is replaced with complete equity ownership by a private group.
Going-Private Transaction
A going-private transaction involves the buyout of all of a publicly traded company's shares, resulting in the company becoming privately owned.
Borrowed Funds
Money obtained through loans, typically used for business ventures or investment with an expectation of repayment.
Incumbent Management
The current team operating and managing a company, particularly during an attempt of take-over or acquisition.
- Comprehend the principles and terminologies associated with mergers, acquisitions, divestitures, and corporate governance.
Verified Answer
DL
Learning Objectives
- Comprehend the principles and terminologies associated with mergers, acquisitions, divestitures, and corporate governance.