As a General Rule, a Transaction Is Taxable to the Target

question 70

True/False

As a general rule, a transaction is taxable to the target company shareholders if they receive the acquiring firm's stock and non-taxable if they receive cash.

---

Definitions:

Legal System

The comprehensive structure of rules, procedures, institutions, and laws through which a society applies and enforces legal order.

Ethics

The moral principles that govern a person's behavior or the conducting of an activity.

Merger Decisions

Decisions taken by companies to consolidate with or acquire another company, often aimed at growth or enhancing competitive advantage.

Shareholders' Profits

The portion of a company's earnings that is distributed to its shareholders.