Which of the following is one of the most extreme examples of firm re-leveraging that occurs when someone uses a firm's debt capacity to buy out the majority of the firm's equity holders?
A) Debt buyout
B) Equity buyout
C) Leveraged buyout
D) Separation buyout

Question

Quizplus · Accepted Answer

A leveraged buyout (LBO) is a financial transaction where a company's existing debt is used to acquire a majority of the company's equity, often by a group of private investors or the management team. This process significantly increases the company's debt level as the acquisition is largely funded through borrowing.

Which of the Following Is One of the Most Extreme