4. 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 directl 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 ability of the target firm's shareholders to benefit from future merger-related gains. Is this statement true or false? False True 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 choose which statements are correct. Diagram: Merger Tax Effects A Check all that apply. Target shareholders 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 acquiring firm adds acquired assets to its books at their appraised values. The acquiring firm creates goodwill that can be depreciated for tax purposes