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One of the Justifications for Leveraged Buyouts in the 1980s

Question 144

Multiple Choice
One of the justifications for leveraged buyouts in the 1980s was that they introduced the "discipline of debt." This refers to the fact that

One of the justifications for leveraged buyouts in the 1980s was that they introduced the "discipline of debt." This refers to the fact that


A) "plowback" is a costly form of raising funds.
B) interest payments have priority over dividend payments.
C) double taxation of income raises the attraction of borrowing.
D) government debt forces firms to borrow more as well.

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