If an acquirer buys most of the operating assets of a target firm, the target generally is forced to liquidate its remaining assets and pay the after-tax proceeds to its shareholders.

Question

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When an acquirer buys most of the operating assets of a target firm, the target is generally left with few or no assets to continue operating independently. Therefore, the target is forced to liquidate its remaining assets and pay the after-tax proceeds to its shareholders.

If an Acquirer Buys Most of the Operating Assets of a Target