When a Management Team Buys the Firm from Current Shareholders

question 34

Multiple Choice

When a management team buys the firm from current shareholders while continuing to manage and often incurring large segments of debt, it is known as a:

• A)Management buyout.
• B)Spin-off.
• C)Successful greenmail attempt.
• D)Corporate break-up.

---

Definitions:

Piece Rate

A pay system in which employees are paid based on the amount of work they produce, such as the number of items made or tasks completed.

Plastic Toys

Manufactured playthings made from various types of plastic, often designed for children's entertainment and education.

Employee Stock Plans

Programs offered by companies allowing employees to purchase shares at a discount or receive stock as part of their compensation package.

High-Involvement

An organizational strategy that aims to engage employees deeply in their work and decision-making processes.