Empirical studies show that the operating efficiency of firms having undergone a leverage buyout,______ over the following 3 years.
A) Increases
B) Decreases
C) Does not change
D) Shows no clear trend

Question

Quizplus · Accepted Answer

Empirical studies have found that firms undergoing a leverage buyout show an improvement in their operating efficiency over the following three years. This is partially due to the new management's focus on cost-cutting and streamlining operations to pay off the debt incurred during the buyout.

Empirical Studies Show That the Operating Efficiency of Firms Having