A leveraged buyout refers to:
A)a firm restructuring itself by selling off unrelated units of the company's portfolio
B)a firm pursuing its core competencies by seeking to build a top management team that comes from a similar background
C)a restructuring action whereby the managers of a firm, its employees and/or an external party buy all of the assets of a business, financed largely with debt, and take the firm private
D)an action where the management of a firm and/or an external party buy all of the assets of a business, financed largely with equity

Question

Quizplus · Accepted Answer

A leveraged buyout (LBO) is a restructuring action whereby the managers of a firm, its employees, and/or an external party buy all of the assets of a business, financed largely with debt, and take the firm private. This is often done with the intention of restructuring the company and making it more profitable before either reselling it or taking it public again. It differs from other forms of buyouts, such as equity buyouts, in its heavy reliance on debt financing.

A Leveraged Buyout Refers To