Which of the Following Is Not True About Mergers and Acquisitions

question 105

Multiple Choice

Which of the following is not true about mergers and acquisitions and taxes?

• A) Tax considerations and strategies are likely to have an important impact on how a deal is structured by affecting the amount, timing, and composition of the price offered to a target firm.
• B) Tax factors are likely to affect how the combined firms are organized following closing, as the tax ramifications of a corporate structure are quite different from those of a limited liability company or partnership.
• C) Potential tax savings are often the primary motivation for an acquisition or merger.
• D) Transactions may be either partly or entirely taxable to the target firm's shareholders or tax-free.
• E) None of the above

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Definitions:

Condition Precedent

A legal term for an event or action that must occur or be completed before a contract becomes effective or before certain obligations are expected to be performed.

Insurance Policy

A contract between an individual or entity and an insurance company, outlining the terms for the insurance company to compensate the insured in the event of a loss.

Notification Requirement

A legal or regulatory condition that requires a party to inform another party or authority about certain information or changes, often within a specified time frame.

Third Party

An individual or group other than the two primarily involved in a transaction or legal situation.