Which One of the Following Statements Is Correct

question 27

Multiple Choice

Which one of the following statements is correct?

• A) If an acquisition is made with cash then the cost of that acquisition is dependent upon the acquisition gains.
• B) Acquisitions made by exchanging shares of stock are normally taxable transactions.
• C) The management of an acquiring firm may put itself at risk of losing control of the firm if they do acquisitions using shares of stock.
• D) The stockholders of the acquiring firm will be better off when an acquisition results in losses if the acquisition was made with cash rather than with stock.
• E) Acquisitions based on legitimate business purposes are not taxable transactions regardless of the means of financing used.

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Definitions:

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A quantitative connection or correlation between two or more variables, often described by a formula or equation.

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The measure of the displacement amplitude of secondary or shear waves, which are a type of seismic wave that moves through the interior of the Earth.

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