Question

Rothman Corporation and Zenco, Inc., combine and form a new company that retains the name, Rothman Corporation. When combining their firms, Rothman purchases all of the assets and assumes all of the liabilities of Zenco. This is an example of:a.An appraisal.b.A merger.
c.A consolidation.d.A reincorporation.

Answer 1

Answer:

A. Merger

Explanation:

In case of a merger, two or more entities come together and form a new entity. In case of a merger one company takes over all assets and assumes all liabilities of the other company.

Merger offers synergistic gains and achieves economies of scale.

Usually in case of a merger, the business of the other entity is continued as merger usually happens between companies engaged in the same line of business.

In the present case, Rothmans Corporation purchased all assets and assumed all liabilities of Zenco Inc and also retained it's name as the merged entity.

This is a case of a merger.