One Advantage of Acquiring a Corporation Via a Stock Purchase

question 4

True/False

One advantage of acquiring a corporation via a stock purchase instead of an asset purchase is that a stock purchase avoids the transfer of the acquired corporation's liabilities.

---

Definitions:

Liability

A liability is a company's financial debt or obligation that arises during the course of business operations, listed on the right-hand side of the balance sheet.

Asset

Resources with economic value owned by an individual, corporation, or country, expected to provide future benefits.

Tax Deductible

Expenses that can be subtracted from gross income to reduce the amount of income subject to income tax.

Repayment

The act of paying back borrowed money, usually with interest, over a period of time according to a predetermined schedule.