It is impossible for a leveraged buyout to make sense to common equity investors but not to other investors,such as pre-LBO debt holders and preferred stockholders.

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It is possible for a leveraged buyout to make sense to common equity investors but not to other investors, such as pre-LBO debt holders and preferred stockholders. This is because the increased debt incurred during an LBO can increase the risk to pre-LBO debt holders and decrease the value of preferred stock, while common equity investors may see the potential for higher returns if the LBO is successful.

It Is Impossible for a Leveraged Buyout to Make Sense