Answer (D) is correct. A merger is a business combination in which the acquiring firm absorbs a second firm, and the acquiring firm remains in business as a combination of the two merged firms. The acquiring firm usually maintains its name and identity. Mergers are legally straightforward because there is usually a single bidder and payment is made primarily with stock. The shareholders of each firm involved with the merger are required to vote to approve the merger. However, merger of the operations of two firms may ultimately result from an acquisition of stock.