. Which of the following is a not a reason for a business combination to take place?

A) Cost savings through elimination of duplicate facilities.

B) Quick entry for new and existing products into domestic and foreign markets.

C) Diversification of business risk.

D) Vertical integration.

E) Increase in stock price of the acquired company.

Answer: E

Learning Objective: 02-01

Topic: Business combination―Reasons to combine

Difficulty: 1 Easy

Blooms: Remember

AACSB: Reflective Thinking

AICPA: BB Critical Thinking

AICPA: FN Measurement