A Taxable Merger Offer Is One Where the Acquiring Company

question 71

True/False

A taxable merger offer is one where the acquiring company offers to purchase the target company with cash.However,the same deal is not taxable if the merger is paid by exchanging stocks.Such nontaxable bids should be more popular by far.

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Definitions:

General Sales Taxes

A tax imposed on sales transactions, usually calculated as a percentage of the sales price and collected by the seller at the point of purchase.

Personal Income Taxes

Taxes levied on the income of individuals, typically graduated so that higher income levels are taxed at higher rates.

Progressive

Describes a tax system where the tax rate increases as the taxable base amount increases, typically aimed at reducing income inequality.

Proportional

Having a constant relation in degree or number between two or more variables.