A firm can use which method of financing for an acquisition structured as either an asset or stock acquisition?
A)Cash
B)Issuing Debt
C)Issuing Stock
D)All of the above

Question

Quizplus · Accepted Answer

A firm can use any or all of the above methods of financing for an acquisition. Cash may be used if the firm has excess cash reserves, but issuing debt or stock may also be viable options. Issuing debt may be particularly attractive if the firm has a strong credit rating, as it may be able to obtain favorable terms. On the other hand, issuing stock may be attractive if the firm's shares are trading at a high price and it wants to avoid taking on additional debt. Ultimately, the choice of financing method will depend on the specific circumstances of the acquisition and the firm's financial position.

A Firm Can Use Which Method of Financing for an Acquisition