When an Outside Group Acquires a Firm, Primarily Through the Use

question 106

Multiple Choice

When an outside group acquires a firm, primarily through the use of borrowed funds, the acquisition is known as a:

• A)Management buyout.
• B)Tender offer.
• C)Leveraged buyout.
• D)Successful proxy fight.

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Definitions:

Recoups All Costs

A situation where the total expenses of an investment or project are fully recovered.

Competitive Bidding

Competitive bidding is a procurement process where several suppliers submit bids to win a contract, offering the best terms in terms of price, quality, and service.

Firm Bidding

A bidding process where the bid price is fixed and non-negotiable, often used in contexts requiring budget adherence or strict cost controls.

Target Cost

is the estimated price at which a product needs to be sold in the market, guiding the design and manufacturing process to ensure profitability.