One Justification Given for the Leveraged Buyouts of the 1980s

question 19

Essay

One justification given for the leveraged buyouts of the 1980s was the "discipline of debt." It was thought that the firms, after leveraging, would perform in a superior manner, thus increasing economic efficiency.Explain this reasoning.

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Definitions:

Mean

An average of a group of values, computed by dividing the sum of the group of values by the number of values in the group.

Frequency Distribution

A mathematical function showing the number of instances in which a variable attains each of its possible values.

Histogram

A diagram that presents the grouped data from a frequency table.

Frequency Distribution

This represents the way in which data is divided or distributed across different possible values or ranges, typically shown in a table or graph.