Question

​Big-Store and​ Little-Store are both corporations that sell Frisbees.​ Little-Store purchases all the shares of​ Big-Store, but both corporations keep their separate legal existence under the idea of a​ ________.

A. standstill agreement

B. multinational corporation

C. greenmail

D. share exchange

E. merger

Answer 1

Under a standstill agreement, there is a contract which helps in governing how a bidder of a company can purchase or dispose of stock of a target company.

Multinational corporation is the one thet operates both in home country and foreign country under single parent name.

Greenmail is a process where threat is used to forcefully takeover a company by purchasing its stock.

Merger is an agreement which helps in unifying two different companies under the name of one single company.

Share exchange is the process or transaction under which all or some shares of one corporation are exchanged for those of another corporation and the existence of both the companies remain intact.

So, the correct option is D. share exchange.