2. Leveraged buyouts (S33.1) True or false?

a. One of the first tasks of an LBO’s financial manager is to pay down debt.

b. Once an LBO or MBO goes private, it almost always stays private.

c. Many early MBOs were arranged for unwanted divisions of large diversified companies.

d. “Carried interest” refers to the deferral of interest payments on LBO debt.

e. Private-equity partnerships have limited lives. The main purpose is to force the general partners to seek out quick-payback investments.

f. Managers of private-equity partnerships have an incentive to make risky investments.