Match the Term with Its Definition

question 24

Multiple Choice

Match the term with its definition.
-A leveraged buyout involving the purchase of a group of similar companies with the intent of making the firms into one larger company for eventual sale or to be taken public

• A)build-up LBO
• B)business broker
• C)bust-up LBO
• D)double taxation
• E)employee stock ownership plan (ESOP)
• F)harvesting (exiting)
• G)initial public offering (IPO)
• H)leveraged buyout (LBO)
• I)management buyout (MBO)
• J)opportunity cost of funds
• K)private equity recapitalization
• L)seller financing

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Definitions:

Par Common Stock

The value designated to shares of common stock in the articles of incorporation, known as the nominal or face value.

Stock Split

A corporate action where a company divides its existing shares into multiple shares to boost the liquidity of the shares, though the overall value of the company remains unchanged.

Market Value

The present cost at which a service or asset is available for purchasing or selling on the open market.

Stock Split

A corporate action where a company divides its existing shares into multiple shares to boost the liquidity of the shares, though the market capitalization remains the same.