One of the key attributes that makes a firm a good candidate for an LBO is that it has a solid position in the industry with reasonable expectations for future growth.

Question

Quizplus · Accepted Answer

A firm with a solid position in its industry and a reasonable expectation for future growth is desirable for an LBO because it can generate the necessary cash flows to repay the debt financing used to fund the transaction. This type of firm also has the potential to increase its value over time, allowing the private equity firm to exit the investment at a profit.

One of the Key Attributes That Makes a Firm a Good