One of the Key Attributes That Makes a Firm a Good

question 37

True/False

One of the key attributes that makes a firm a good candidate for an LBO is that it has a relatively high level of debt and a low level of relatively liquid assets that could be used as loan collateral.

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Definitions:

Balance Sheet

A summary that provides information on a corporation's current assets, outstanding debts, and shareholder equity at a distinct time.

Sarbanes-Oxley Act

A federal law established in 2002 aimed at improving corporate governance and financial reporting to protect investors from fraudulent practices by corporations.

Report On Internal Control

A document that outlines the effectiveness of a company's internal controls over financial reporting.

Price-Earnings Ratio

A metric used to evaluate the relative value of a company's shares, calculated as the market value per share divided by earnings per share.