B. 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. The structure of the takeover bid affects the capital structure of the post-merger firm Is this statement true or false? True 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 The transaction is taxable, and transactions are recorded at book value. Statements Check all that apply Target stockholders tender their shares, receive cash, and pay personal taxes on realized capital gain. Goodwill is created for tax purposes The acquiring firm depreciates acquired assets at the old rate The acquiring firm adds acquired assets to its books at their book values