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25-55 Which of the Following Transactions Does Not Meet the Legal

Question 54

Multiple Choice

25-55 Which of the following transactions does not meet the legal definition of a highly leveraged transaction (HLT) ?

A) A buyout that increases debt from $100 million to $150 million resulting in a 55 percent leverage ratio.
B) A recapitalization that increases debt from $100 million to $250 million resulting in a 55 percent leverage ratio.
C) An acquisition that increases debt from $100 million to $250 million resulting in a 55 percent leverage ratio.
D) An acquisition that increases debt from $100 million to $150 million resulting in an 80 percent leverage ratio.
E) An acquisition that results in an 80 percent leverage ratio.

Correct Answer: