Which of the following represent potential tax gains from an acquisition?
I.a reduction in the level of debt
II.an increase in surplus funds
III.the use of net operating losses
IV.an increased use of leverage
A)I and IV only
B)II and III only
C)III and IV only
D)I and III only
E)II, III, and IV only

Question

Quizplus · Accepted Answer

The use of net operating losses (III) and an increased use of leverage (IV) can provide tax benefits. Net operating losses can offset taxable income, and increased leverage can lead to interest tax shields.

Which of the Following Represent Potential Tax Gains from an Acquisition