Please clearly indicate whether the following statements are true or false.
T F 1. An important task of the PMI team is to establish metrics to evaluate progress.
T F 2. Post-merger integration tends to go most smoothly when it is not treated as its own separate project.
T F 3. It doesn’t make sense to use a levered beta to calculate an unlevered cost of equity.
T F 4. Passage of the Sarbanes-Oxley Act has made it too costly for some small firms to remain public.
T F 5. One con of an equity deal (as opposed to an asset deal) is that leases may not be transferrable from the seller to the buyer.
T F 6. Because of the increased debt in its capital structure, a firm that has undergone an LBO will usually have a lower WACC than it had before the LBO.
T F 7. As a general rule, the buyer is able to avoid all liabilities it doesn’t explicitly take on if the deal is structured as an asset purchase.
T F 8. If an acquirer pays for a target with stock, it shares the risk of synergies not materializing with the shareholders of the target.
T F 9. If a seller will realize a large taxable gain from the sale of the target, the buyer will generally prefer to purchase the assets rather than the equity (all else equal).
T F 10. If a target is purchased in a cash deal, the target shareholders will have an immediate tax liability.
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