Answer (D) is correct. Many factors influence whether a transaction should be a merger or an acquisition of stock. Whether the companies are in the same industry or not is usually not a factor. In an acquisition of stock, an acquiring firm usually makes a tender offer directly to the shareholders of another firm to obtain a controlling interest. Therefore, the acquiring firm must directly deal with shareholders of the other firm. There is the possibility that some minority shareholders will not tender their shares. Management may be hostile to the combination, which usually causes an increase in the stock price. This increase will require the acquiring firm to pay more money in its tender offer. On the other hand, a merger is much more straightforward legally. It is usually a negotiated arrangement between a single bidder and the acquired firm. However, a merger does require a formal vote of the shareholders of each of the merging firms, whereas an acquisition does not.