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Explain: Why does sellers require higher price to be paid for acquiring "net assets purchase" than...

Explain:

Why does sellers require higher price to be paid for acquiring "net assets purchase" than "stocks purchase"?

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Answer #1

DETAILS GIVEN IN QUESTION:

Why does sellers require higher price to be paid for acquiring "net assets purchase" than "stocks purchase"?

ANSWER:

UNDER "NET ASSETS PURCHASE" NET ASSETS ARE ACTUALLY SOLD TO THE BUYER. HERE, FULL OWNERSHIP OF NET ASSETS IS TRANSFERRED TO THE BUYER.

WHEREAS, UNDER STOCK PURCHASE, ONLY SHARES ARE SOLD TO BUYER. STOCK PURCHASE GIVES ONLY PART OWNERSHIP OF THE COMPANY TO THE BUYER. NET ASSETS REMAIN WITH THE COMPANY.

HENCE, SELLERS REQUIRE HIGHER PRICE TO BE PAID FOR ACQUIRING " NET ASSETS PURCHASE " THAN "STOCK PURCHASE".

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