Questions: Which of the following is a characteristic of mergers? Generally not regulated The target company ceases to exist when the buyer takes it over Two businesses combine and go forward as One company takes over another company

The answer is: The target company ceases to exist when the buyer takes it over.

This is incorrect. Mergers are often subject to regulatory approval to ensure they do not create monopolies or reduce competition in the market. Regulatory bodies such as the Federal Trade Commission (FTC) in the United States or the European Commission in the EU review mergers to ensure compliance with antitrust laws.

This is correct. In a merger, particularly in the case of an acquisition, the target company is absorbed by the acquiring company and ceases to exist as a separate legal entity. The assets and liabilities of the target company are taken over by the acquiring company.

This option is incomplete. However, it suggests a merger of equals, where two companies combine to form a new entity. This is a characteristic of some mergers, but the statement is incomplete and does not fully describe a characteristic of mergers.

This describes an acquisition rather than a merger. In a merger, two companies may combine to form a new entity, whereas in an acquisition, one company takes over another, and the acquired company may cease to exist as a separate entity.