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Commercial Awareness Discussion
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<blockquote data-quote="futuretraineesolicitor" data-source="post: 97254" data-attributes="member: 4098"><p>Hello, [USER=1572]@Dheepa[/USER]. I was revisiting this answer of mine since I'm preparing for the question "How is an M&A deal financed?" As I understand, other than the equity financing method that I've explained above, there are <strong>two more methods</strong> to financing an acquisition. One is using cash from the company's cash reserves which can be accumulated from not paying out dividends to your shareholders or paying very little in the name of dividends whilst being highly profitable or even paying adequate dividends but being extremely profitable (for example Apple or Google). This is the second method.</p><p></p><p>The third and the last method is by using debt - basically just borrowing money from lenders because IPOing just for an acquisition doesn't make sense.</p><p></p><p>My question to you is, is there anything that I can add to the "cash" and the "debt" part of this answer to make this more comprehensive? To me, these methods sound fairly obvious and with a question like this one, I want to go into as much detail as I possibly can. Am I missing any details that can support my answer further?</p><p></p><p>Thanks a lot.</p></blockquote><p></p>
[QUOTE="futuretraineesolicitor, post: 97254, member: 4098"] Hello, [USER=1572]@Dheepa[/USER]. I was revisiting this answer of mine since I'm preparing for the question "How is an M&A deal financed?" As I understand, other than the equity financing method that I've explained above, there are [B]two more methods[/B] to financing an acquisition. One is using cash from the company's cash reserves which can be accumulated from not paying out dividends to your shareholders or paying very little in the name of dividends whilst being highly profitable or even paying adequate dividends but being extremely profitable (for example Apple or Google). This is the second method. The third and the last method is by using debt - basically just borrowing money from lenders because IPOing just for an acquisition doesn't make sense. My question to you is, is there anything that I can add to the "cash" and the "debt" part of this answer to make this more comprehensive? To me, these methods sound fairly obvious and with a question like this one, I want to go into as much detail as I possibly can. Am I missing any details that can support my answer further? Thanks a lot. [/QUOTE]
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