Series 79 practice questionmediumMerger Types
Which of the following merger structures is often chosen for its ability to accommodate tax-free treatment under Section 368 of the Internal Revenue Code?
- AStatutory merger✓ Correct answer
- BAsset acquisition
- CCash tender offer
- DSpin-off merger
Explanation
Why A — Statutory merger
Statutory mergers can achieve tax-free treatment if the requirements of Section 368 are met. The trap is assuming asset acquisitions or cash deals qualify for the same tax treatment.
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