Question

A leveraged buyout (LBO) Multiple Choice is based on an expectation that the new private owners will not restructure the company at any cost. requires the buyer to disclose financial statements of the company once it becomes private. forces shareholders to sell their shares at lower prices than the actual value. changes the ownership structure of a company from public to private.

Answer 1

Answer:

Changes the ownership structure of a company from public to private.

Explanation:

A leveraged buyout (LBO) is the acquisition of another company using a significant amount of borrowed money to meet the cost of acquisition. The assets of the company being acquired are often used as collateral for the loans, along with the assets of the acquiring company.

It is known to change the ownership structure of a company from public to private.

This is because it isn't usually sanctioned by the target company. It is also seen as ironic in that a company's success, in terms of assets on the balance sheet, can be used against it as collateral by a hostile company.