Question

Recently, Taco Rocket has considered buying a local competitor and the two would combine under the Taco Rocket name. This is an example of what?

A. Joint venture

B. Franchise

C. Merger

D. Subsidiary

Answer 1

A corporate merger occurs when two formerly separate firms combine to become a single firm, either through an acquisition or a lateral merger. The newly purchased firm may continue to operate under its former company name.

Step-by-step explanation:

A corporate merger occurs when two formerly separate firms combine to become a single firm. When one firm purchases another, it is called an acquisition. An acquisition may not look just like a merger, since the newly purchased firm may continue to operate under its former company name. Mergers can also be lateral, where two firms of similar sizes combine to become one. However, both mergers and acquisitions lead to two formerly separate firms operating under common ownership, and so they are commonly grouped together.