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Smith Ltd has announced a takeover bid for Foster Ltd, one of the Australia's largest companies. The Chairman of Smith Ltd argues that the takeover

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Smith Ltd has announced a takeover bid for Foster Ltd, one of the Australia's largest companies. The Chairman of Smith Ltd argues that the takeover will be economically viable because it will lead to more efficient management of Foster's assets, there are tax advantages involved, and value can be created by dividing Foster Ltd into three or four separate entities, each based on a single line of business. Critically evaluate each of the three reasons for takeover viability suggested by the Chairman

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