QUESTION 38 If a transaction involves a cash purchase of target stock, the target company's tax cost or basis in the acquired assets is increased or "stepped up" automatically to their fair market value (FMV), which is equal to the purchase price paid by the acquirer. True False QUESTION 39 In a cash purchase of assets, the target's shareholders could be taxed twice, once when the firm pays taxes on any gains and a second time when the proceeds from the sale are paid to the shareholders either as a dividend or distribution following liquidation of the corporation. True False QUESTION 40 In a taxable purchase of target stock with cash, the target firm does not restate (i.e., revalue) its assets and liabilities for tax purposes to reflect the amount that the acquirer paid for the shares of common stock. Rather, the tax basis (i.e., their value on the target's financial statements) of assets and liabilities of the target before the acquisition carries over to the acquirer after the acquisition. True False