Research by Hayn on the Role That the Tax Attributes

Research by Hayn on the role that the tax attributes of transactions played in determining abnormal returns for targets and acquirers found:

A) Tax-free status is a prerequisite of certain deals. Targets that do not receive such a status may decline to continue with the deal and may look to other bidders who can structure the transaction so that such a status is attained
B) Potential tax benefits stemming from net operating loss carryforwards and unused tax credits positively affect announcement period returns of firms involved in tax-free acquisitions
C) Capital gains and the step-up in the acquired assets basis affects returns of firms involved in taxable acquisitions
D) All the above