Question
Which one of the following statements is correct? Multiple Choice a) The leverage associated with an acquisition increases the tax liability of the acquiring firm
Which one of the following statements is correct?
Multiple Choice
a) The leverage associated with an acquisition increases the tax liability of the acquiring firm
b) Firms with large net operating losses tend to be acquiring firms rather than target firms
c) if a firm uses it surplus cash to acquire another firm then the shareholders of the acquiring firm immediately incur a tax liability related to the transaction
d) If either an increase or a decrease in the level of production causes the average cost per unit to increase then the firm is currently operating at its optimal production level
e) Firms can always benefit from economies of scale if they increase the size of their firm through acquisitions
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