Series 79 practice questionhardMerger Types
A reverse merger is best characterized as a transaction in which:
- AA private company acquires a larger public company
- BA subsidiary merges with its parent, with the parent as the survivor
- CA statutory merger is executed under state law
- DA private company merges into a public shell to become publicly traded✓ Correct answer
Explanation
Why D — A private company merges into a public shell to become publicly traded
A reverse merger occurs when a private company merges into a public shell, gaining public status without a traditional IPO. The other options describe different transaction structures.
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