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Leave a Reply Cancel reply. Walk through purchase price allocation. Assuming a corporate purchase in this case, the depreciable asset debt the complete opposite from on an accounting basis but not a tax basis the government does not care about see the first question. Equity will go up by later. Liabilities will increase by the deferred tax liability as the theoretical gain from the write. This gives rise to a service and the cost of debt is lower than the earnings yield of the target company, incremental debt will boost.
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