In a Takeover Where Consideration Is Provided in the Form

question 38

True/False

In a takeover where consideration is provided in the form of shares,shareholders in the target company are able to defer a potential capital gains tax liability until the shares in the acquiring company they accepted as consideration are sold.

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Definitions:

2.5-Year Note

A promissory note or bond maturing in 2.5 years from the date it was issued.

Principal Amount

The original sum of money borrowed in a loan or the initial amount of investment, excluding any interest or dividends.

60-Day Note

A financial instrument that is payable within 60 days, often used in business transactions as a form of short-term borrowing.

Intermediate Calculations

Calculations performed as steps toward solving a final problem or arriving at a final figure, often used in mathematical or financial analyses.