The proliferation of junk bonds in the 1980s greatly increased the feasibility of LBOs.

Question

Quizplus · Accepted Answer

The availability of junk bonds, which were high-yield and high-risk securities, provided a new source of financing for LBOs in the 1980s. This made it easier for companies to borrow large amounts of money to finance the purchase of other companies in a leveraged buyout. Therefore, the proliferation of junk bonds greatly increased the feasibility of LBOs.

The Proliferation of Junk Bonds in the 1980s Greatly Increased