Purchase of All Assets Self-Quiz

 

 

 

 

 

 

 

In a “purchase of all assets” transaction, the company that purchases all of the other firm’s assets also purchases:
Choice 1 all of its obligations.
Choice 2 all of its lawsuits.
Choice 3 none of its obligations.
Choice 4 none of its real property.
J Co. and K Co. are engaging in an asset sale whereby J will sell all of its assets to K. After such a purchase of all assets transaction, the selling firm, here J Co., typically:
Choice 1 merges with the buying firm.
Choice 2 pays a liquidating distribution to shareholders and dissolves.
Choice 3 continues business operations under a new operating name.
Choice 4 enters settlement agreements with all individuals suing the firm.
Hi Co. and Lo Co. are engaging in an asset purchase transaction with Lo selling all of its assets to Hi. Which individuals are entitled to a vote on whether or not the asset purchase transaction should proceed?
Choice 1 Shareholders of Lo Co.
Choice 2 Shareholders of Hi Co.
Choice 3 Shareholders of neither corporation.
Choice 4 Shareholders of both corporations.
Which of the following companies is most likely to engage in an asset purchase agreement?
Choice 1 A buyer with a strong financial position looking to stamp out competitors.
Choice 2 A seller with valuable assets but facing large liability.
Choice 3 A buyer with valuable assets but facing large liability.
Choice 4 A seller with a strong financial position looking to enter new markets.
When a company engages in any form of merger transaction and a part of the transaction cost is accounted for by a bookkeeping entry that is attributed to the firm’s history and not necessarily to a physical asset, that entry is labeled as:
Choice 1 transactional value.
Choice 2 intellectual property.
Choice 3 added value.
Choice 4 goodwill.

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