Which of the Following Is Generally a Way That LBOs

question 14

Multiple Choice

Which of the following is generally a way that LBOs can help a firm realize its potential value?

• A)The synergies created allow for cost savings
• B)The transaction reduces the disparity between a firm's actual and potential share price
• C)The acquisition reduces the likelihood of competition in the industry
• D)The transaction requires debt repayment with future free cash flow leaving management no discretion over the investment of these funds
• E)The buyout gives an opportunity to adjust the management structure and makeup