_______ it is impossible for a tax-free acquisition to take place. Question 13Select one: a. If the stockholders in the target firm will retain an equity interest in the bidder b. If an acquisition is for business purposes c. If the purchasing firm exchanges its own stock for the selling firm's equity d. If an acquisition is being undertaken with the express purpose of avoiding taxes e. If the selling shareholders will be considered to have exchanged their old shares for new ones of equal value

_______ it is impossible for a tax-free acquisition to take place. Question 13Select one: a. If the stockholders in the target firm will retain an equity interest in the bidder b. If an acquisition is for business purposes c. If the purchasing firm exchanges its own stock for the selling firm's equity d. If an acquisition is being undertaken with the express purpose of avoiding taxes e. If the selling shareholders will be considered to have exchanged their old shares for new ones of equal value

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter10: Long-lived Tangible And Intangible Assets

Section: Chapter Questions

Problem 12Q

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How does a merger allow a firm to circumvent tax laws? a By offering the firm a chance to use the losses in one company to offset profits and tax liabilities of another. b The merger would allow the company to grow their revenue stream into a lower percentage tax bracket. c Tax breaks are offered to newly merged firms d Application of the Clayton Act of 1914 e Application of the Sherman Antitrust Act
The minority stakeholders may exchange their P100 par value shares for P400 cash in case they do not agree with the acquisition what type of anti-hostile takeover strategy ???
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How does a merger allow a firm to circumvent tax laws?
[S1] By executing a rights offering, we acknowledge the preemptive right of current ordinary shareholders. [S2] When an initial public offering has been made, the underwriter would remit to the issuing entity cash equal to the total issue price less any issuance cost chargeable against the former. *a. Only S1 is true.b. Only S2 is true.c. Both are true.d. Both are false.
Some advantages of obtaining control by acquiring a controlling interest in stock include all but: O The cost may be lower since only a controlling interest in the assets, not the total assets, is acquired. O The legal liability of each corporation is limited to its own assets. O Negotiations are made directly with the acquiree's management. O Tax advantages may result from preservation of the legal entities.
Ethical Considerations. Are poison-pill defenses ethical? If a potential acquirer buys company stock legally,thereby becoming a part owner of the company, shouldmanagement be allowed to entrench itself against thewishes of this owner? Explain your answer.
12. Which of the following point is not consistent with the decision of undertaking a merger and acquisition? Select one: a. Reducing operational synergies b. Capturing tax benefits c. Taking advantage of economies of scale d. Improving target management
In the process of determining fair value, the exit price refers to: Multiple Choice the amount the firm would receive if it sold a given asset. the amount the firm would pay if it bought an asset of the same type and condition as the one being valued. the sum of the future cash flows expected to be generated by continuing to use the asset. the expected sale price of the stock in a corporate buy-out.
QUESTION 13 Why the horizontal mergers are more carefully scrutinized by regulatory authorities, when compared to the conglomerate mergers? O Because horizontal mergers can be more directly associated to monopolistic practices O Because horizontal mergers can be more directly associated to tax evasion O Because horizontal mergers are guided by game theory O Because horizontal mergers are a previous step in performing conglomerate mergers
Share repurchases are often more tax-efficient than declaring dividends because Question 8 options: a) companies can reduce their taxable income by reducing the number of shares outstanding b) only shareholders who sell their stock are taxed on any resulting capital gain c) the ordinary income tax rate on buybacks is often lower than the long-term capital gains tax rate on dividends d) B and C are correct e) None of the options are correct
Which of the following statements is CORRECT? a. Most business in the U.S. is conducted by corporations, and corporations' popularity results primarily from their favorable tax treatment. b. Corporations and partnerships have an advantage over proprietorships because a proprietor is exposed to unlimited liability, but the liability of all investors in the other types of businesses is more limited. c. Conflicts can exist between stockholders and managers, but potential conflicts are reduced by the possibility of hostile takeovers. d. A good goal for a firm's management is the maximization of expected EPS. e. For a stock to be in equilibrium, its intrinsic value must be greater than the actual market price.