Earnouts Tend to Shift Risk from the Seller to the Acquirer

question 70

True/False

Earnouts tend to shift risk from the seller to the acquirer in that a higher price is paid only when the seller or acquired firm has met or exceeded certain performance criteria. True of False

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Definitions:

Interest Rate

The rate at which a borrower pays interest to a lender for the utilization of borrowed funds.

Mortgages

Loans specifically used to purchase real estate, in which the property itself serves as collateral against the borrowed funds.

Reduction

A decrease in the amount, extent, or size of something.

Hourly Rate

The amount of money paid for each hour of work.