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Happy Sunday, future bankers!

Hope everyone is doing well! Today we’re covering the difference between stock purchases and asset purchases, a time that you had to work long hours, and how top Wall Street executives have seen a big bump in the pay packages.

🚀 Let’s get into it.

🔢 Technical Question

What’s the difference between a stock purchase and an asset purchase?

A stock purchase and an asset purchase are two different ways of acquiring a company, each with its own implications and considerations:

Stock Purchase

• In a stock purchase, the buyer acquires the company’s stock, becoming a shareholder with interest in its assets and liabilities.

• The acquired company does not change, but its ownership does.

• The buyer acquires all assets and liabilities of the target company through ownership transfer.

• Goodwill cannot be deducted until the stock is later sold by the buyer.

Asset Purchase

• In an asset purchase, the buyer acquires specific assets of the company, such as equipment, licenses, customer lists, and inventory.

• The seller remains as the legal owner of the entity.

• Asset sales generally do not include purchasing the target’s cash, and the seller typically retains its long-term debt obligations.

• The buyer can dictate what, if any, liabilities it is going to assume in the transaction.

• A major tax advantage is that the buyer can “step up” the basis of many assets over their current tax values and obtain tax deductions for depreciation and/or amortization.

• With an asset transaction, goodwill, which is the amount paid for a company over and above the value of its tangible assets, can be amortized on a straight-line basis over 15 years for tax purposes.

In summary, the main difference between a stock purchase and an asset purchase lies in what is being acquired by the purchaser. In a stock purchase, the buyer is acquiring ownership in the company itself, including all its assets and liabilities. In contrast, an asset purchase involves the acquisition of individual assets and liabilities, allowing the buyer to pick and choose what they are acquiring.

🗣 Behavioral Question

Tell me about a time that you had to work long hours to complete a project.

Here are some best practices to consider when responding to this question:

1. Use the STAR Method: This method helps you organize your response and ensures you provide a comprehensive answer.

   • Situation: Describe the context or background of the situation.

   • Task: Explain the task you were assigned or the challenge you faced.

   • Action: Detail the specific actions you took to accomplish the task.

   • Result: Share the outcome of your actions, emphasizing the positive impact.

2. Be Specific: Provide a specific example from your past experience. The example should demonstrate your ability to work under pressure, manage your time effectively, and stay committed to achieving the goal.

3. Highlight Your Skills: Use this opportunity to highlight relevant skills such as problem-solving, adaptability, perseverance, and your ability to work long hours when necessary.

4. Focus on Positive Outcomes: Even if the situation was challenging, try to focus on the positive outcomes, what you learned from the experience, and how it helped you grow professionally.

5. Practice: Before the interview, prepare and practice your response to ensure it’s concise and covers all aspects of the STAR method.

Remember, the interviewer is interested in understanding your work ethic, time management skills, and how you handle demanding situations. So, ensure your response showcases these aspects effectively.

🗞 Industry News

💰 Wall Street Executives Are Getting Paid

In 2023, Wall Street saw a dip in cash bonuses, with an average drop of 2% to $176,500 for New York City employees, according to New York State Comptroller Thomas DiNapoli. This was attributed to market volatility and the influx of younger workers. However, top executives at major banks like Goldman Sachs, Morgan Stanley, Citigroup, and Wells Fargo saw an increase in their bonuses. Notably, John Waldron, the Chief Operating Officer of Goldman Sachs, saw a 30% rise in his cash bonus to $11.26 million.

Despite the challenging year marked by caution and the worst dealmaking in a decade, there’s hope for a Wall Street revival in 2024. Major deals are already being announced, such as Capital One’s acquisition of Discover Financial Services for roughly $35 billion. These deals could generate significant new fees for the biggest banks. The securities industry, which employed 198,500 workers in New York City last year, contributes significantly to the fortunes of New York state and city. However, the city’s share of the industry’s jobs has been declining, with Texas emerging as a significant employment center for the finance industry.

Read more about this story below.

Thanks for tuning in today! Best of luck to everyone working through recruiting right now. If you sign an offer, reply to this email and let us know about it! Like seriously, do it—we’d love to hear about it!