In finance parlance WHAT IS LEVERAGED BUYOUT?



Answer:
A LBO, or leveraged buyout, is a way to take a company private.

Say you have a publicly-traded company. But management believes that the market is seriously under-valuing the company and that the company could be worth more if it were private.

Management, or a consortium of other individuals, then borrow large sums of money from investment banks (this is the "leveraged" part - anything with leveraging involves debt/borrowing) and use it to buy out all current shareholders and retire the shares, thus becoming the sole owners of the company. Other Questions and Answers:
  • Do non-profit organizations ever merge?
  • What are the audit reports under societies registration act?
  • How often should you refiance your home?
  • what do stock markets gurantee to prospective investors?
  • what do you mean by support and resistance level in the stock market trading?
  • Iam makeing a auditorium what name of auditorium?.?
  • How inflation effects GDP?
  • I need to do a SWOT and PESTLE analysis on the Public Sector. Any examples would be greatly appreciated.?