A Leveraged Buyout Refers To

question 29

Multiple Choice

A leveraged buyout refers to:

• A)one firm issues stock to take over another firm.
• B)one firm trades its stock for the stock of another firm.
• C)a firm goes heavily into debt in order to obtain the funds to purchase the shares of the public stockholders and thus take the firm private.
• D)one firm pays cash for the shares of a takeover firm's shares.

---

Definitions:

Wage Rate

the standard amount of compensation given for labor services per unit of time, often expressed per hour or year.

Lump Sum Payment

A single payment made at a particular time, as opposed to multiple payments over time, often used in contexts like settlements or pensions.

Labor Income

Earnings derived from work or employment, including wages, salaries, commissions, and bonuses.

Budget Line

A graphical depiction in economics that shows all possible combinations of two goods that can be purchased with a fixed amount of income.