Question

Big Lite Inc. purchases Canton Bulbs, its direct competitor, by buying most of its stock. In this scenario, Big Lite Inc. is involved in a(n) _____.

a. acquisition
b. leveraged buyout
c. conglomerate merger
d. franchise
e. vertical merger

Answer 1

Answer:

a. acquisition

Explanation:

• Acquisition takes place when a company buys more or all the shares of another company to gain control over that company.
• when a company buy more than 50% of the stock and other assets allows the buyer to make decisions about newly acquired assets with no approval of the company shareholder
• so correct answer is a. acquisition