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    Question

      Which of the following best describes a merger of two

    companies where a financially sick or distress business is merged with a sound company as part of a financial rehabilitation under the supervision of a financial body?
    A Arranged Merger Correct Answer Incorrect Answer
    B Friendly Merger Correct Answer Incorrect Answer
    C Negotiated Merger Correct Answer Incorrect Answer
    D Hostile takeover Correct Answer Incorrect Answer
    E Offer for Sale Correct Answer Incorrect Answer

    Solution

    Merger refers to a situation where two or more existing firm combine to form a new entity either a new firm is incorporated or one of the existing firms survives and another is merged with it.   Arranged merger : when the regulatory body arranges the merger for financially sick company with others to rehabilitate it.

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