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19 June, 12:54

True/False: the two most common means of acquisition are the entrepreneur's direct purchase of the firm's entire stock or assets or the bootstrap purchase of these assets.

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  1. 19 June, 13:43
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    True

    Explanation:

    According to Thomas Duening and Robert Hisrich book "Technology Entrepreneurship: Taking Innovation to the Marketplace", the direct purchase has some problems: long-term capital gain to the seller and double taxation. The bootstrap purchase eliminates those problems: the acquiring company can acquire a small amount of the firm, 20 or 30% in cash and the remaining with a long-term note.
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