The Term "Leverage" in Leveraged Buyouts Refers to The

question 31

Multiple Choice

The term "leverage" in leveraged buyouts refers to the:

• A) firm's increased concentration on the firm's core competencies.
• B) amount of new debt incurred in buying the firm.
• C) fact that the employees are purchasing the firm for which they work.
• D) process of removing the firm's stock from public trading.

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Definitions:

FVTPL

Fair Value Through Profit or Loss, an accounting strategy whereby financial assets are valued at their current market price, with changes in fair value recorded in the profit or loss statement.

Equity Method

An accounting technique used by a company to record its investment in another company when it has significant influence but not complete control.

Unrealized Gains And Losses

Gains and losses that have occurred on paper, but the corresponding financial assets have not yet been sold or realized.

Voting Shares

Shares that grant the holder the right to vote on company matters, typically at shareholder meetings.