Which one of the following statements is correct? Multiple Choice The leverage associated with an...
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Which one of the following statements is correct? Multiple Choice The leverage associated with an acquisition increases the tax liability of the acquiring firm. A firm may benefit from an acquisition if it can lower its capital requirements. If a firm uses its surplus cash to acquire another firm, then the shareholders of the acquiring firm immediately incur a tax liability related to the transaction. The IRS automatically approves acquisitions that are primarily designed to lower federal taxes.
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