Question
Please help me to choose the correct answers. I dont need the explanation. Thank you! --Which of the following is NOT a risk specific to
Please help me to choose the correct answers. I dont need the explanation. Thank you!
--Which of the following is NOT a risk specific to Leveraged Buyout (LBO)s?
a. Cash flow may be insufficient to cover debt service.
b. The LBO investors may not be able to recapture equity through free cash flow.
c. Synergies may not emerge.
--Which one is NOT a characteristic of a good LBO candidate?
a. A good LBO prospect must start with low debt ratios.
b. A good LBO prospect should have excellent free cash flow.
c. A good LBO prospect should have a recognizable brand and ongoing business.
--The primary reason for an LBO is to:
a. Obtain control of existing company through mostly borrowed funds.
b. Obtain control by leveraging existing assets of the firm as well as accepting existing liabilities.
c. The idea is to build up equity over time as free cash flow is used to reduce leverage over time
d. None of these are reasons or purposes.
e. All are potential reasons.
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