________ financing is used to restructure a financially troubled company.
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A. B. C. D. E.Explanation
Turnaround financing is capital is used to restructure a troubled company that is at a more established stage of development.
The correct answer for the question is E. Turnaround.
Turnaround financing is used to restructure a financially troubled company. It is a type of financing that aims to assist struggling companies in improving their financial situation and returning to profitability. Turnaround financing typically involves providing capital and/or financial assistance to a company that is experiencing financial distress or facing the risk of bankruptcy.
When a company is in financial trouble, it may face difficulties in meeting its debt obligations, maintaining operations, or generating sufficient cash flow. Turnaround financing helps address these issues by providing the necessary funds to stabilize the company's operations, restructure its debt, and implement strategic changes to improve its financial performance.
Turnaround financing can take various forms, depending on the specific circumstances of the distressed company. It may involve injecting equity capital into the company, providing loans or credit lines, or assisting with debt restructuring and negotiations with creditors. The ultimate goal of turnaround financing is to restore the company's financial health, enhance its operations, and create a path towards long-term sustainability.
Let's briefly discuss the other answer choices:
A. None of these answers: This option implies that none of the given answer choices is correct, which is not the case here.
B. Leveraged-buyout: Leveraged-buyout (LBO) is a type of acquisition in which a company is purchased primarily using borrowed funds. While an LBO can potentially lead to financial restructuring, it is primarily associated with the acquisition of a company rather than its turnaround.
C. Bridge: Bridge financing refers to short-term funding provided to a company until it secures long-term financing or achieves a specific milestone. While bridge financing can be utilized in various situations, it is not specifically associated with restructuring financially troubled companies.
D. Management-buyout: A management buyout (MBO) occurs when a company's existing management team purchases a significant portion or all of the company's ownership from its current owners. While an MBO can occur in the context of a financially troubled company, it is not specifically focused on restructuring the company but rather a change in ownership.
In summary, turnaround financing is the most appropriate answer as it specifically addresses the restructuring needs of financially troubled companies.