An attempt by employees,management,or a group of investors to purchase an organization primarily through borrowing is called an):
A)Golden parachute.
B)Arbitrage agreement.
C)Factor transaction.
D)Leveraged buyout.

Question

Quizplus · Accepted Answer

A leveraged buyout (LBO) is a type of acquisition where a group of investors or management borrows a large amount of money to take over a company. The debt is typically secured by the assets of the company being acquired, which serves as collateral for the loan. The goal of an LBO is to use the assets of the company being acquired to pay off the debt incurred to purchase the company, leaving the new owners with a controlling stake in the company and hopefully a profitable business.

An Attempt by Employees,management,or a Group of Investors to Purchase