Answer (B) is correct . Purchasing the stock of another company is advantageous when management and the board of directors of the purchased company are hostile to the combination because the acquisition does not require a formal vote by the shareholders. Thus, the management and the board of directors cannot influence shareholders. Also, after the acquisition, both companies continue to operate separately.
Answer (A) is incorrect because A merger is not an acquisition. In a merger, only one of the combining companies survives.
Answer (C) is incorrect because An acquisition of all of the firm’s assets requires a vote from the shareholders.
Answer (D) is incorrect because A consolidation is different from an acquisition since, in a consolidation, a new company is formed and neither of the merging companies survives.
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