hard · Investment Banking

In a stock sale, how does this write-up impact the combined balance sheet's liabilities?

1. It has no impact on liabilities as it only affects the asset side of the balance sheet.
2. It creates a $200 million account payable to the seller.
3. It reduces total debt by $200 million as the assets are more valuable.
4. It creates a $50 million Deferred Tax Liability (at 25% tax).

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