The Purchase Price for a Target Firm May Be Fixed

question 117

True/False

The purchase price for a target firm may be fixed at the time of closing, subject to future adjustment, or be contingent on future performance.

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Definitions:

Management Buyout

An acquisition strategy where the existing managers of a company buy a significant part or all of the company from its owners or its parent organization.

Lack of Capital

A situation where there is insufficient financial resources or investment to fund current operations or expand a business.

Legal Structure

The organizational form a business takes, which can affect liability, taxation, and regulatory obligations.

Employee Retention

The ability of an organization to retain its employees and reduce turnover by creating a positive working environment and offering incentives.