Which of the following is a tender offer that utilizes borrowed funds and the acquired firm's assets as collateral?
A) Unfriendly take-over
B) Divestiture
C) Repurchase
D) Leveraged buyout

Question

Quizplus · Accepted Answer

A leveraged buyout (LBO) is a tender offer in which the acquiring firm uses borrowed funds (leverage) to finance the purchase of the target company. In this type of transaction, the target company's assets are often used as collateral to secure the financing. LBOs are typically initiated by private equity firms or other financial investors and are often considered risky due to the high levels of debt involved.

Which of the Following Is a Tender Offer That Utilizes