Which of the Following Is Not a Candidate for a Leveraged

question 35

Multiple Choice

Which of the following is not a candidate for a leveraged buyout?

• A)a venture with stable and adequate operating cash flows
• B)a venture with a high amount of equity relative to debt
• C)a venture with the ability to protect market share
• D)a venture with a high debt ratio

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Definitions:

Multinational Firm

A company that conducts business and has facilities and other assets in at least one country other than its home country.

Transnational Firm

A company that operates across national borders, managing production or service facilities in more than one country.

International Firm

A business that engages in commercial transactions across national borders.

Loss-Leader Pricing

Deliberately selling a product below its customary price, not to increase sales, but to attract customers’ attention to it in hopes that they will buy other products with large markups as well.