Miniature Precision Corporation,a microprocessor manufacturer,recently acquired Cameron-Price,a plastics mould manufacturer.Miniature Precision financed the transaction with 90 percent borrowed money and used Cameron-Price's assets as collateral.What is this type of merger commonly known as?
A) greenmail
B) a leveraged buyout
C) a institutional takeover
D) a hostile takeover

Question

Quizplus · Accepted Answer

This type of merger is commonly known as a leveraged buyout (LBO), where a company acquires another company using a significant amount of borrowed funds, with the assets of the acquired company being used as collateral.

Miniature Precision Corporation,a Microprocessor Manufacturer,recently Acquired Cameron-Price,a Plastics Mould Manufacturer