A leveraged buyout occurs where:
A)a company or division is purchased by a small group of investors,including its management.
B)a company employs a selective buyback to purchase the shareholding of a major shareholder.
C)a company or division is purchased by a small group of investors involving large amounts of debt.
D)assets,including a division,are sold to another company.

Question

Quizplus · Accepted Answer

A leveraged buyout (LBO) typically involves a small group of investors using a significant amount of debt to acquire a company or division. This debt is often secured by the assets of the company being acquired, with the expectation that the cash flows generated by the acquired company will be sufficient to repay the debt over time. LBOs often involve the participation of the company's management team, as they have a vested interest in the success of the acquisition. The other options (A, B, and D) do not accurately describe a leveraged buyout.

A Leveraged Buyout Occurs Where