In a(n)________ managers and/or employees borrow money from a financial institution and pay the owner the total agreed-upon price at closing;then they use the cash generated from the company's operations to pay off the debt.

Question

Quizplus · Accepted Answer

The described situation is a leveraged buyout (LBO), where the managers and/or employees use borrowed money to purchase the company and then pay off the debt with cash generated from operations. Option A describes a family loan, which is not necessarily related to the company's operations. Option B refers to an employee stock ownership plan, which involves purchasing company stock rather than the entire company. Option D describes a sale where some of the purchase price is paid in cash and the rest in a note, but it does not necessarily involve borrowing money from a financial institution.

In A(n)________ Managers And/or Employees Borrow Money from a Financial