A leveraged buyout is an arrangement in which managers and/or employees borrow money from a financial institution and pay the owners:
A) a discounted price, over time, that leverages their good credit.
B) the total agreed-on price at closing using the cash generated from the company's operations to pay off the debt.
C) the total agreed-on price at closing using alternative financing sources to pay off the debt.
D) the total agreed-on price at closing using the cash generated from additional stock issued by the company.

Question

Quizplus · Accepted Answer

In a leveraged buyout, the buyers use borrowed funds to pay the total agreed-on price at closing, and then use the company's cash flows to pay off the debt over time.

A Leveraged Buyout Is an Arrangement in Which Managers And/or