The term "leverage" in leveraged buyouts refers to the:
A) firm's increased concentration on the firm's core competencies.
B) amount of new debt incurred in buying the firm.
C) fact that the employees are purchasing the firm for which they work.
D) process of removing the firm's stock from public trading.

Question

Quizplus · Accepted Answer

Leverage in leveraged buyouts refers to the use of a significant amount of debt to finance the purchase of a company, which increases the risk and potential return for the buyer. This debt is often used to fund a large portion of the purchase price, which allows the buyer to use less of their own funds and potentially achieve a higher return on investment.

The Term "Leverage" in Leveraged Buyouts Refers to The