Miniature Precision Corporation, a Microprocessor Manufacturer, Recently Acquired Cameron-Price, a Plastics

question 84

Multiple Choice

Miniature Precision Corporation, a microprocessor manufacturer, recently acquired Cameron-Price, a plastics mould manufacturer. Miniature Precision financed the transaction with 90 percent borrowed money and used Cameron-Price's assets as collateral. What is this type of merger commonly known as?

• A) greenmail
• B) leveraged buyout
• C) institutional takeover
• D) hostile takeover

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Definitions:

Ability To Raise Capital

The capacity of a company to secure funds for its operations, growth, or to meet financial obligations, through debt, equity, or other financial instruments.

Limited Personal Liability

A legal status in which an individual's responsibility for business debts or legal actions is restricted to their investment in the business.

Agency Problems

Conflicts of interest that arise when there's a separation between the management of a company and its owners.

Corporation

A legal entity that is separate from its owners, with the ability to own assets, incur liabilities, and conduct business.