Mary Saxon, a Dutch investment banker, is advising a local client on a potential foreign acquisition in the U.S. Currently, there is a competing cash bid for the target by a U.S. competitor. However, Saxon argues that the target should be worth more to the Dutch client than to the U.S. competitor, since Dutch accounting rules permit the considerable goodwill from the transaction to be written off against owners’ equity, thus avoiding any ongoing charges against income. In contrast, U.S. rules require goodwill to be written off over 40 years or less. What would you recommend to the Dutch bidder?

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