n NISM Certifications
XV NISM Series XV
Medium

When two companies merge to form a new entity and cease to exist individually, it is called ______.

Practice question from NISM XV Mock Test 4 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Merger

  2. Consolidation

    Correct answer

  3. C

    Acquisition

  4. D

    Takeover

Why this is the answer

In a consolidation, two companies combine to form a new company, and the original entities no longer exist. In a merger or acquisition, typically one company survives while the other is absorbed.

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