Miniature Precision Corporation, a microprocessor manufacturer, recently acquired Cameron-Price, a plastics mould manufacturer. Miniature Precision financed the transaction with 90 percent borrowed money and used Cameron-Price's assets as collateral. What is this type of merger commonly known as?
A) greenmail
B) leveraged buyout
C) institutional takeover
D) hostile takeover

Question

Quizplus · Accepted Answer

This is a leveraged buyout as Miniature Precision Corporation financed the acquisition primarily by borrowing the money and using the acquired company's assets as collateral.

Miniature Precision Corporation, a Microprocessor Manufacturer, Recently Acquired Cameron-Price, a Plastics