Which of the Following Statements Is FALSE

question 4

Multiple Choice

Which of the following statements is FALSE?

• A)Any acquirer shares received in full or partial exchange for target shares triggers an immediate tax liability for target shareholders.
• B)In a friendly takeover,the target board of directors supports the merger,negotiates with potential acquirers,and agrees on a price that is ultimately put to a shareholder vote.
• C)How the acquirer pays for the target affects the taxes of both the target shareholders and the combined firm.
• D)If the acquirer purchases the target assets directly (rather than the target stock),then it can step up the book value of the target's assets to the purchase price.