1. All of the following are required for an acquisition to be considered tax-free except:
A. A Cash payment to the target firm's shareholders.
B. The receipt of an equity interest in the acquirer by the target firm's shareholders.
C. A business purpose, other than avoiding taxes, for the acquisition.
D. The continuity of equity interest.
E. The payment of equity shares in the acquirer to the target firm's shareholders.
2. Black Teas recently acquired Green Teas in a transaction that had a net present value of $1.23 million. The $1.23 million is referred to as:
A. The agency effect.
B. Synergy.
C. The consolidating value.
D. The diversification benefit.
E. The consolidation effect.