In a Tax-Free Acquisition,the Shareholders of the Target Firm

question 62

Multiple Choice

In a tax-free acquisition,the shareholders of the target firm:

• A)receive income that is considered to be tax-exempt.
• B)gift their shares to a tax-exempt organization and therefore have no taxable gain.
• C)are viewed as having exchanged their shares.
• D)sell their shares to a qualifying entity thereby avoiding both income and capital gains taxes.
• E)sell their shares at cost thereby avoiding the capital gains tax.

Discuss the requirements set by insurance contracts for insured parties to maintain safety and security standards.

Understand the concept of externalities and their impact on social welfare.

Analyze how government interventions, such as taxes and subsidies, can address externalities.

Comprehend the role of property rights in resolving disputes over external costs and benefits.