A leveraged buyout is an arrangement in which managers and/or employees borrow money from a financial institution, and pay the owners: a discounted price over time that leverages their good credit. the total agreed-on price at closing using the cash generated from the company's operations to pay off the debt. the total agreed-on price at closing using alternative financing sources to pay off the debt. the total agreed-on price at closing using the cash generated from additional stock issued by the company