Which of the Following Statements Is FALSE

question 56

Multiple Choice

Which of the following statements is FALSE?

• A)The method of payment (cash or stock)affects how the value of the target's assets is recorded for tax purposes and it affects the combined firm's financial statements for financial reporting.
• B)The combined firm must mark up the value assigned to the target's assets on the financial statements by allocating the purchase price to target assets according to their fair market value.
• C)Any goodwill created in a merger deal can be amortized for tax purposes over 15 years.
• D)Many transactions are carried out as acquisitive reorganizations under the tax code.These structures allow the target shareholders to defer their tax liability on the part of the payment made in acquirer stock but they do not allow the acquirer to step up the book value of the target assets.

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Definitions:

Peak-level negotiations

Peak-level negotiations refer to collective bargaining discussions conducted at the top or national level between centralized organizations of employers and unions, affecting a large portion of the workforce.

Great Britain

An island located off the northwest coast of Europe comprising England, Scotland, and Wales.

Voluntarism

Refers to the principle or system that relies on voluntary action, especially in the context of social or economic matters, rather than compulsory measures enforced by the government.

Institutionalized system

A well-established and widely accepted system that operates according to formal rules and norms within a particular context.