The use of banks to finance leveraged buy-outs has often caused a misdirection of capital.

Question

Quizplus · Accepted Answer

This statement is true. Leveraged buy-outs (LBOs) involve taking on a large amount of debt to purchase a company. Banks have traditionally been involved in providing the financing for these deals, but this can lead to a misdirection of capital as too much focus may be placed on paying off the debt rather than investing in the growth and development of the acquired company. Additionally, when the debt becomes unsustainable, it can lead to bankruptcy and job losses.

The Use of Banks to Finance Leveraged Buy-Outs Has Often