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2011 June, Q1 PURSUIT

This topic has 1 reply, 2 voices, and was last updated 8 years ago by John Moffat.

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August 29, 2016 at 12:22 pm #335950
nrjsma
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In the fifth line the question says that Pursuit Co also pay off any outstanding debt that Fodder Co owed.
What does it mean? Just a company acquiring another company is buying by paying its value plus premium. How can it pay loans? If it pays loans then it will give less cash to Fodder Co, isnt it?
August 29, 2016 at 1:45 pm #336017
John Moffat
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If you take over a company you pay money to the shareholders in the company and take over all the assets and liabilities of the company (unless you have made a special other agreement).
So you are now responsible for all the liabilities!
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