When a management team buys the firm from current shareholders while continuing to manage and often incurring large segments of debt, it is known as a:
A)Management buyout.
B)Spin-off.
C)Successful greenmail attempt.
D)Corporate break-up.

Question

Quizplus · Accepted Answer

This scenario is describing a management buyout, where the current management team buys the firm from existing shareholders while taking on debt to finance the purchase.

When a Management Team Buys the Firm from Current Shareholders