What type of finance involves funding a company specifically for acquiring another company?

• A. Debt Execution
• B. Private Capital Raising
• C. Acquisition Finance
• D. Structured Products

Answer: (C)

Acquisition finance is specifically tailored for funding a company that is looking to acquire another business. This type of finance encompasses various methods and instruments used to facilitate the purchase, which can include debt financing, equity financing, and other financial structures designed to meet the needs of the acquiring party.

When a company seeks to grow or diversify its operations through acquisitions, it often requires significant capital, and acquisition finance is structured to provide that capital. The financing can take many forms, such as bank loans, bonds, or equity offerings, which are specifically arranged to align with the acquisition strategy, taking into consideration factors such as the expected cash flows of the target company and the overall financial health of the acquiring firm.

In contrast, the other options offered relate to different aspects of finance. Debt execution typically pertains to the process of managing or collecting debts, and while it may be a part of the financing discussion, it doesn’t focus specifically on acquisition scenarios. Private capital raising refers to raising funds from private investors and encompasses a broader scope than just acquisitions. Structured products involve specially created financial instruments that are used for investment and risk management but do not exclusively address funding for acquisitions. Thus, acquisition finance is the precise term used to describe the funding specifically for the purpose of acquiring another