True/False: the two most common means of acquisition are the entrepreneur's direct purchase of the firm's entire stock or assets

Question

Dovator [93]

3 years ago

11

True/False: the two most common means of acquisition are the entrepreneur's direct purchase of the firm's entire stock or assets

or the bootstrap purchase of these assets.

Business

1 answer:

Neporo4naja [7] · Answer 1 · 2022-07-12T10:03:40+03:00

Answer:

True

Explanation:

According to Thomas Duening and Robert Hisrich book "Technology Entrepreneurship: Taking Innovation to the Marketplace", the direct purchase has some problems: long-term capital gain to the seller and double taxation. The bootstrap purchase eliminates those problems: the acquiring company can acquire a small amount of the firm, 20 or 30% in cash and the remaining with a long-term note.