14. Taxes and takeover bids In a merger, the acquiring firm can either pay in cash or make a stock offer. The acquirer can purchase the target firm's assets or buy shares directly from the target firm's shareholders. Consider the following statement about the impact of the takeover bid structure: The structure of the takeover bid affects the capital structure of the post-merger firm. Is this statement true or false? O True O False A takeover bid can be structured in different ways, making it either a taxable or a nontaxable offer. Based on your understanding of the impact of takeover bids on the target firm and the acquiring firm, review the diagram below and check which statements are correct. Diagram: Merger Tax Effects Payment is made mostly in cash by purchasing the target firm's stock. A The transaction is taxable, and transactions are recorded at their appraised values. Statements Check all that apply. The acquiring firm adds acquired assets to its books at their appraised values. Target stockholders tender their shares, receive cash, and pay personal taxes on realized capital gain. The acquiring firm is responsible for the tax liability incurred by the target firm. The target firm incurs immediate tax liability for the amount of gain over the book value. The acquiring firm adds acquired assets to its books at their book value. The acquiring firm creates goodwill that can be depreciated for tax purposes