To purchase two electronic retailers,BuzzFree Inc.borrows $40 million from banks and raised $8 million through preferred stock.After the deal closes,BuzzFree Inc.uses $20 million of cash and assets from one of the acquired retailer to clear $25 million of the bank loan.This is an example of _____.

Question

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This is an example of a leveraged buyout, where BuzzFree Inc. borrows a significant amount of money to acquire the two electronic retailers and then uses the assets from one of the acquired retailers to pay off a portion of the debt. This type of acquisition is commonly used in corporate finance.

To Purchase Two Electronic Retailers,BuzzFree Inc