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High Tech Firm Acquisition

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Your firm is interested in acquiring a high tech firm to expand its business. It is considering making the acquisition using cash, stock, or a combination of both. You have been tasked to make a recommendation on the type of acquisition that will result with the minimal tax impact. Analyze the pros and cons of cash, stock, and combined stock / cash acquisitions, and propose the method that minimizes taxes. Support your proposal with examples.

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Solution Preview

This topic provided the opportunity to evaluate the pros and cons of various types of acquisitions. Acquisitions provide companies with a path to exponential growth and increased profits. Consideration should be given to structure considering an acquisition. Buyers and sellers must consider tax implications as well. The key to a successful acquisition is structuring a deal that is beneficial to the buyer and seller.
The structure type must be chosen carefully. Recognition of the different implications is critical in making a recommendation for a company on the type of acquisition.

A cash purchase ...

Solution Summary

High tech firm acquisitions are analyzed in the solution. The methods that minimize taxes are proposed.