In a ________ a stock purchase is financed by debt.

Question

Quizplus · Accepted Answer

In a leveraged buyout (LBO), a stock purchase is financed by debt. The acquiring company (usually a private equity firm) uses a combination of its own equity and borrowed money to buy the target company's stock. The target company's assets are then used as collateral for the debt, allowing the acquiring company to make the purchase without using too much of their own money. The debt is typically repaid over time using the target company's future earnings.

In a ________ a Stock Purchase Is Financed by Debt