Which one of these statements is correct regarding acquisitions?
A) The cost of a cash acquisition to the acquiring firm is equal to the cash paid minus the taxes incurred by the target firm's shareholders.
B) Neither cash nor share acquisitions affect the control of the acquiring firm.
C) Share financing is generally more common than cash financing for smaller acquisitions.
D) Target firm shareholders share in both the gains and losses resulting from a stock acquisition.
E) Cash acquisitions create a tax liability for the acquiring firm's shareholders.
Correct Answer:
Verified
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