The acquirer may reduce the total cost of an acquisition by deferring some portion of the purchase price.

Question

Quizplus · Accepted Answer

This statement is true. An acquirer may negotiate to defer some portion of the purchase price, which can reduce the upfront cash outlay and potentially lower the total cost of the acquisition. This can be structured as an earn-out, where a portion of the purchase price is contingent on the acquired company meeting certain performance targets in the future.

The Acquirer May Reduce the Total Cost of an Acquisition