Which of the represent disadvantages of a cash purchase of target stock?
A) Buyer responsible for known and unknown liabilities.
B) Buyer may avoid need to obtain consents to assignments on contracts.
C) NOLs and tax credits pass to the buyer.
D) No state sales transfer, or use taxes have to be paid.
E) Enables circumvention of target's board in the event a hostile takeover is initiated.

Question

Quizplus · Accepted Answer

A cash purchase of target stock makes the buyer responsible for both known and unknown liabilities of the target company, which can be a significant disadvantage.

Which of the Represent Disadvantages of a Cash Purchase of Target