A__________ is a method of structuring a financial merger, whereas a__________ involves the sale ofthe firm's assets.
A) congeneric buyout; divestiture
B) horizontal merger; leveraged divestiture
C) leveraged buyout; divestiture
D) leveraged buyout; bankruptcy

Question

Quizplus · Accepted Answer

A leveraged buyout (LBO) is a method of structuring a financial merger, where the buyer uses a combination of equity and debt to acquire a company. Divestiture involves the sale of a company's assets. Therefore, a leveraged divestiture is not a commonly used term, whereas a leveraged buyout with a subsequent divestiture of certain assets may be possible.

A__________ Is a Method of Structuring a Financial Merger, Whereas