Structuring the Business Combination The nine choices listed A through I pertain to how a busi¬

ness combination is structured. From these choices, select the appropriate answer for questions 1-13 that follow the choices.

a. Acquisition of assets

b. Acquisition of common stock

c. Statutory merger

d. Statutory consolidation

e. Purchase accounting

f. Pooling of interests accounting g. Taxable transaction (appendix-related)

h. Nontaxable (tax-deferred) transaction (appendix-related)

i. None of the above More than one choice may be appropriate for some of the questions.

1. The acquiring company does not want to be responsible for the target company’s unrecorded postretirement benefit obligations.

2. The acquiring company does not want to be responsible for the target company’s potential un¬ recorded liabilities pertaining to toxic waste site cleanups.

3. The target company’s contracts and leases are not transferable.
4. The legal existence of only the target company is to be terminated.
5. The legal existence of the acquiring company and the target company is to be terminated.
6. The target company desires to continue in business as a nonoperating company.
7. The target company’s directors have turned down the acquiring company’s offer.
8. The acquiring company will have to force out a small minority of dissenting stockholders of the target company.
9. A holding company is to be formed.
10. The acquiring company desires to issue preferred stock as consideration.
Optional Questions (Appendix 4A-Related)
11. The target company’s, stockholders desire a cash deal that maximizes the after-tax dollars they will receive.
12. The acquiring company does not want to be responsible for taxes at the corporate level.
13. The erty. v