Firms that are stuck in dying industries may not have assets that can generate profits, but still have something valuable "Tax loss carryforwards"!

Due to the losses they have accumulated over time, the firms are allowed to use these to reduce future tax payments. However, a firm that doesn't expect to make profits in the future will have no tax payments to reduce. If the firm is purchased by a firm that expects to make profits in the future, will these carryforwards increase the price they are willing to pay?

https://www.investopedia.com/terms/t/tax-loss-carryforward.asp

Answer rating: 100% (QA)

Yes tax loss carryforwards can raise the price a company is wil... View the full answer