Against the will of Drive Corporation’s management, Gull Corporation offers Driv
ID: 2426837 • Letter: A
Question
Against the will of Drive Corporation’s management, Gull Corporation offers Drive’s shareholders 2 shares of Gull common stock for each share of Drive common and 50 shares of Gull common for each share of Drive preferred. The results of a hostile takeover yield Gull 85% of Drive common stock and 100% of the preferred. The only stock it did not obtain was that owned by management. This transaction qualifies as a(n): Select one:
a. "Type A" consolidation.
b. Acquisitive "Type D" reorganization.
c. "Type D" split-up reorganization.
d. "Type B" reorganization.
Explanation / Answer
d. "Type B" reorganization.
type B reorganisation is the acquisition of common and preffered target stock by the acquiring can be directly from the shareholders or from the target corporation.
as 85% of common stock and 100% of preffered stock was acquired by the Gull corporation , it was type B reorganisation