What type of financing is typically instrumental in bringing about leveraged buyouts?
A) Common-stock financing
B) Preferred-stock financing
C) Investment-grade bonds
D) Speculative-grade bonds

Question

Quizplus · Accepted Answer

Leveraged buyouts involve acquiring a company using a significant amount of debt, which is typically financed through speculative-grade bonds. This allows the acquirer to use the assets of the target company as collateral for the debt, increasing the potential returns. Common-stock and preferred-stock financing are less commonly used in leveraged buyouts, as they involve diluting ownership and control of the company. Investment-grade bonds are typically used for more conservative financing needs.

What Type of Financing Is Typically Instrumental in Bringing About