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if T takes all of the stock of S in exchange for $24.73 in cash per share and did not make a Section 338

election. Assuming T issues bonds to raise the cash necessary to pay for the acquisition. Also Assuming S had 100 million shares outstanding.


1 how much tax will S shareholders have to pay? assuming long-term

capital gains rates (15%) and had a tax basis in the stock of $10 per share

2 As a shareholder of S, what is better all cash or stock offer?

Top Answer

1.The tax that S shareholder will pay is $220.95 million. 2.As... View the full answer

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