During the LBO Craze, When Several Troubled Firms Merged into One

question 20

Multiple Choice

During the LBO craze, when several troubled firms merged into one firm to reduce overhead, this was referred to as a rollup. What were some of the general methods used to turn these firms around?

• A)Investors would supply large amounts of funding for the new, larger entity to encourage growth.
• B)Investors typically allowed 10 or 20 years to see a return on these investments.
• C)Investors would typically eliminate employees and reduce the salaries and wages of those who remained.
• D)Investors would consult with management of the several firms bought out to increase long-term profitability in the new, merged business.

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Definitions:

Hypo-

Prefix indicating low, under, beneath, down, or less than normal.

Mega-

A prefix in medical terminology indicating enlargement or one million units.

Sym-

A prefix in medical terms denoting "together" or "with," used to describe conditions that involve multiple factors or elements acting together.

An-

Prefix indicating without or lack of.