In a(n) ____________, the managers of the ﬁrm purchase the shares outstanding in the open market and take the ﬁrm private.
A) Proxy contest.
B) Tender offer.
C) Vertical acquisition.
D) Management buyout.
E) Asset acquisition.

Question

Quizplus · Accepted Answer

A management buyout is when the current managers of a company purchase all outstanding shares and take the company private. They often do this by using borrowed funds, and the managers become the new owners and operators of the company. Therefore, a management buyout is the best choice for this scenario.

In A(n) ____________, the Managers of the ﬁRm Purchase the Shares