A leveraged buyout refers to:
A) a firm restructuring itself by selling off unrelated units of the company's portfolio.
B) a firm pursuing its core competencies by seeking to build a top management team that comes from a similar background.
C) a restructuring action whereby the managers of the firm,the employees,and/or an external party buy all of the assets of a business,financed largely with debt,and take the firm private.
D) an action where the management of the firm and/or an external party buy all of the assets of a business financed largely with equity.

Question

Quizplus · Accepted Answer

A leveraged buyout (LBO) is a restructuring action in which the managers of the firm, the employees, and/or an external party buy all of the assets of a business, financed largely with debt, and take the firm private. This is often done as a way to improve the company's financial and operational performance, and can involve significant risk due to the use of debt financing to make the acquisition.

A Leveraged Buyout Refers To