Other Things Equal, Which of the Following Groups of Stakeholders

question 19

Multiple Choice

Other things equal, which of the following groups of stakeholders should expect to lose value as a result of an LBO?

• A)Selling shareholders
• B)Buying shareholders
• C)Bondholders
• D)Investment bankers

---

Definitions:

Return On Investment

A performance measure used to evaluate the efficiency or profitability of an investment relative to its cost.

Minimum Required Rate

The lowest rate of return or discount rate that investors are willing to accept before investing in a project or financial asset.

Investment Opportunity

Any vehicle or asset that individuals or businesses can put money into in hopes of generating a financial return.

Return On Investment

A financial ratio used to evaluate the effectiveness of an investment, comparing the gain from the investment to its cost.