The management of Corporation A forms Corporation B in which the management owns some stock and institutional investors own the rest.Corporation B issues bonds to institutional investors to raise cash, with which it purchases the assets or stock of Corporation A.The assets of Corporation A are used as security for the bonds issued by Corporation B.This action by management is best described as a:

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The action described in the scenario is a leveraged buyout. This is when a company is purchased with a significant amount of borrowed money, usually through issuing bonds. In this case, Corporation B, which is owned partially by the same management as Corporation A, takes out bonds to purchase the assets or stock of Corporation A, using those assets as security. This is a form of financial engineering that is often used to acquire companies without putting up much of the buyer's own capital.

The Management of Corporation a Forms Corporation B in Which