1. Why might an acquirer want to maintain a target company as a separate legal entity and not merge the target into one of its own subsidiaries or buy the target’s assets? 2. Why might two...

1. Why might an acquirer want to maintain a target company as a separate legal entity and not merge the target into one of its own subsidiaries or buy the target’s assets?

2. Why might two corporations wish to combine tax-free? How could tax costs inhibit an otherwise efficient combination?

3. Why might you expect a cash merger to fetch a higher price for the target’s shares than one in which the purchaser’s stock is exchanged for the target’s stock?