The Intent of the Owners in a Whole-Firm Leveraged Buyout

question 72

True/False

The intent of the owners in a whole-firm leveraged buyout may be to increase the efficiency of the bought-out firm and resell it in five to eight years.This tends to make the managers of the bought-out firm high risk takers, since they will probably not survive the resale and thus have little to lose.

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Definitions:

Spending

The act of using money to purchase goods or services, often considered in the context of personal, government, or business expenditures.

Income

The financial gain acquired by an individual or a business in exchange for providing labor, product, or service or through investing capital.

Economy

The system of production, distribution, and consumption of goods and services within a society, encompassing various sectors like agriculture, manufacturing, and services.

Efficient

The optimum use of resources to achieve the best possible outcome or output with minimal waste.