Which of the Following Is Not True of a Forward

question 55

Multiple Choice

Which of the following is not true of a forward triangular cash merger?

• A) It is considered by the IRS as a purchase of target assets.
• B) It is generally followed by a liquidation of the target firm.
• C) Target shareholders must recognize a gain or loss as if they had sold their shares.
• D) The target's tax attributes carry over to the buyer.
• E) Taxes are paid by the target firm on any gain on the sale of its assets and again by shareholders who receive a liquidating dividend.

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Definitions:

Market Power

The ability of a company or sector to control or influence the market price of its products or services.

Elasticity of Demand

indicates how responsive the quantity demanded of a good is to a change in its price; a restated measure of price sensitivity.

Profit-Maximizing Monopolist

A monopoly that adjusts its production and pricing strategies to achieve the highest possible profit.

Profit-Maximizing Monopolist

A monopolist who adjusts the price and production level of goods or services to achieve the highest possible profit, considering the market demand curve.