The creation of a high?debt, private corporation with improved cash flow and value is the goal in
A) leveraged buyout.
B) issuing junk bonds.
C) a financial merger.
D) conglomerate merger.

Question

Quizplus · Accepted Answer

A leveraged buyout (LBO) involves a high level of debt being used to purchase a company, with the aim of improving the company's cash flow and value so that the debt can be paid off. Therefore, an LBO aligns with the described goal of creating a high-debt private corporation with improved cash flow and value. Issuing junk bonds, financial merger, and conglomerate merger do not necessarily involve the same level of debt or focus on improving cash flow and value in the same way as an LBO.

The Creation of a High?debt, Private Corporation with Improved Cash