An acquirer based in a low-tax country may be able to generate higher cash flows from acquiring a foreign target than an acquirer based in a high-tax country.

Question

Quizplus · Accepted Answer

An acquirer based in a low-tax country may have a competitive advantage as they may be able to generate higher after-tax cash flows from the foreign target due to lower tax rates. On the other hand, an acquirer based in a high-tax country may face higher tax liabilities, reducing their cash flows from the acquisition.

An Acquirer Based in a Low-Tax Country May Be Able