So why are companies happy if you pay them in cash?

...i mean, if an airline buys another one, why do i so often read that they paid cash? is it not more comfortable to pay from one account to another one?

So why are companies happy if you pay them in cash?
Because there is always a cost to credit.
Reply:It is not really cash - it is a cash equivalent like a bank check or a wire transfer, or something else that is as good as cash.





The alternative is to pay with shares of their stock at whatever stock price there was in the stock market on a given day. That is not very desirable for people who want to get real money for what they are selling. You can't go to the supermarket and say "I want to buy a Thanksgiving turkey and all the trimmings and here are some stock certificates to pay for it."
Reply:beats the taxman.
Reply:Corporate mergers involve millions and even billions of dollars. The term "cash" here does not mean a bag full of money handed over the counter. It means they paid in full at the time of the transaction, probably by check or bank transfer. But in corporate mergers, the seller might be willing to take both cash and stock in the new company, but hand over full or partial control of the company to the buyer. This could happen when the buyer does not have the full amount of the cash to buy the company. Or the seller might even take other assets, such as land, machinery or vehicles as partial payment on the sale.





Another alternative to asking for "cash" when you sell something, is to be willing to "take paper". Taking paper means you are accepting their IOU, also referred to as "a note". When you buy a house from an individual, you go to the bank to get a loan so you can pay the owner "cash". But what he gets is a check. But you might also skip the bank and ask the seller if he will "take paper". That means he will finance the sale of the house, and you will make payments to him rather than pay him in full or making payments to the bank. Some sellers may advertise "Willing to take paper!" (or finance) to make it easier for those with marginal credit to buy the house. But a buyer may have the cash (in their checking account) and just pay the seller in full anyway.





The easy way to think about cash in big sales is that you can spend the full amount right after the sale is complete. You can't spend stock, vehicles, land, IOU notes or loans. If you take paper on a sale, and then decide you need the cash, you will need to sell the note (or loan) to someone else at a discount.





Insurance settlements, lawsuites, and lotteries are often paid out over a 10 or 20 year period. So a million dollar lottery winning might be paid out at $50,000 per year for 20 years. But if you need say $3-400,000 cash, you can sell your note (or settlement) at a discount to someone willing to take the payments spread out over years. Or you could take your note (Lottery winning) to a bank and use it as collateral to get a loan for the $300,000.





I hope that clears it up for you.
Reply:it is called 'cash' to differentiate it from a stock swap or something like that, but it is not cash. it is from one account to another.
Reply:They were able to buy them out without taking out a loan or establishing credit. That doesn't mean they handed them 2 billion in cash - just that their bank transferred money.
Reply:b/c human beings love cash
Reply:Cash is liquid money
Reply:no no ,, your talking millions of dollars here,,, its not literal cash, they may write a chect a draft something like that.. meaning they are not trading stocks of shares for the company trade, or raiseing capital or finaceing,,,





Trust me in a major buyout they do not fill an airplane with hundreds of millions in cash dollars an fly it to them
Reply:1. Companies have to pay to accept credit cards. Certain cards cost more money to accept, such as AmEx. (Last time I heard the company charging the card had to pay a .03% charge on each purchase to the credit card company).


2. No waiting for the money to clear in the bank.
Reply:They mean paying in cash as opposed to paying in shares of stock, IOUs, etc.
Reply:Cash transactions are preferable because they do not involve any specific lender fees or insurers.





Generally if it weren't cash the purchase would have to be backed up by a bank, cashier's check for example. The creation of which would cost money.





Banks don't wire or transfer large amounts for their health, they're a business that's into making and holding money. Also, since the bank that holds your funds has actually lent that money out, in many cases a multi million or billion dollar deal can put the bank itself at a loss to cover such transfers especially if it were say an individual selling out to google.
Reply:because cash is definite...there's no chance of it not being there...you see it, you know it's there.
Reply:Cash is more easily hidden from the government. Also you don't have to pay the bank fees if you use cash.
Reply:Easier to hide from taxes? skimp out some of the money? knows for sure your gonna get paid?
Reply:its tax free (cash in hand)