Which of the Following Questions Is FALSE

question 8

Multiple Choice

Which of the following questions is FALSE?

• A) The method of payment (cash or stock) affects how the value of the target's assets is recorded for tax purposes and it affects the combined firm's financial statements for financial reporting.
• B) The combined firm must mark up the value assigned to the target's assets on the financial statements by allocating the purchase price to target assets according to their fair market value.
• C) Any goodwill created in a merger deal can be amortized for tax purposes over 15 years.
• D) Many transactions are carried out as acquisitive reorganizations under the tax code. These structures allow the target shareholders to defer their tax liability on the part of the payment made in acquirer stock but they do not allow the acquirer to step up the book value of the target assets.

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Definitions:

Cleft Lip

A congenital facial malformation where there is a physical split or gap in the upper lip, which can occur alone or with a cleft palate.

Suture Strain

The force applied to a suture, or stitch, used in surgical procedures, which can affect wound healing and suture integrity.

Heavily Sedated

A state of being under the influence of sedative medications to a degree that significantly reduces consciousness and bodily functions.

Cirrhosis

A late stage of scarring (fibrosis) of the liver caused by many forms of liver diseases and conditions, such as hepatitis and chronic alcoholism.