When an outside group acquires a firm, primarily through the use of borrowed funds, the acquisition is known as a:
A)Management buyout.
B)Tender offer.
C)Leveraged buyout.
D)Successful proxy fight.

Question

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A leveraged buyout (LBO) is a type of acquisition in which an outside group uses a significant amount of borrowed funds (i.e. leverage) to purchase a company. The goal is to use the acquired company's assets to generate enough revenue to pay off the debt used to acquire it. The debt is typically secured by the assets of the acquired firm, and the outside group typically uses the cash flows of the firm to pay off the debt over time. A management buyout (A) refers to an acquisition in which the existing management team of a company acquires the majority of the company's shares. A tender offer (B) is a public offer made by an individual or company to purchase shares of a publicly traded company's stock at a premium price. In a successful proxy fight (D), an outside group convinces enough shareholders to vote for the replacement of the company's management or board of directors.

When an Outside Group Acquires a Firm, Primarily Through the Use