The Strategy of Investors Who Are Attempting a Leveraged Buyout

question 342

Multiple Choice

The strategy of investors who are attempting a leveraged buyout is to:

• A)Shape up the company for quick resale.
• B)Use debt to finance the buyout of the firm's stockholders and gain control of the firm themselves.
• C)Secure ownership of all of the existing stock in a company by issuing and selling large amounts of new stock.
• D)Use investment tax credits from the government to acquire all of the physical assets owned by the firm.

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Definitions:

Government Ownership

The possession and control over enterprises and assets by the state or government, rather than private individuals or organizations.

Federal Government

The federal government refers to the national government of a country that is responsible for enacting and enforcing laws, collecting taxes, and managing the country’s affairs.

Defense Spending

Government expenditure on military forces and activities, including salaries, benefits, weapons systems, and operations.

Social Security

A government program that provides financial assistance to people with inadequate or no income, particularly the elderly, disabled, and families with dependent children.