Which of the Following Statements Is False

question 49

Multiple Choice

Which of the following statements is false?

• A) Any acquirer shares received in full or partial exchange for target shares triggers an immediate tax liability for target shareholders.
• B) In a friendly takeover, the target board of directors supports the merger, negotiates with potential acquirers, and agrees on a price that is ultimately put to a shareholder vote.
• C) How the acquirer pays for the target affects the taxes of both the target shareholders and the combined firm.
• D) If the acquirer purchases the target assets directly (rather than the target stock), then it can step up the book value of the target's assets to the purchase price.

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Definitions:

Agents

Individuals or entities that act on behalf of others in business transactions or negotiations.

Principals

Key stakeholders or the main parties involved in a financial transaction or agreement.

Managers

Individuals responsible for directing and overseeing the operations and activities of a company or organization, making strategic decisions to ensure goals are met.

Marginal Benefit

The increased pleasure or usefulness obtained from the consumption of one more unit of a good or service.