The Workers at Scrappy's Metal Fabrication,Inc

question 188

True/False

The workers at Scrappy's Metal Fabrication,Inc.,have learned that the firm is about to close down.They have devised a plan to use debt financing to buy the company's stock from current shareholders with the intention of keeping the company in business,thus saving their jobs.This strategy is called a leveraged buyout.

---

Definitions:

Intangible Asset

An asset without physical substance that holds value for a business, such as patents, trademarks, and copyrights.

Amortization

The process of spreading the cost of an intangible asset over its useful life for accounting and tax purposes.

Indefinite Life

An accounting term for assets that are not subject to depreciation due to their perpetual existence or usefulness.

Outstanding Common Stock

Shares that are issued by a company and held by investors, excluding any shares held as treasury stock by the company itself.