Which of the following is a case in which tax gains are used as a justification for purchasing another firm?

A) The target firm has resources to which the purchaser wants access.
B) The target firm has no unused debt capacity.
C) The target firm has access to markets that the bidder wishes to exploit.
D) The target firm has unused net operating losses that can be used by the bidder.
E) The target firm has resources that are complementary to the bidder.

Unused Net Operating Losses

Tax deductions that occur when a company's allowable tax deductions are greater than its taxable income within a tax period, which can be carried over to reduce taxable income in future years.

Tax Gains

Refers to the profit that is taxable after selling an asset at a price higher than its purchase price.

Unused Debt Capacity

The additional amount a business or individual can borrow without harming creditworthiness, based on current financial obligations.