Question

Hidden Valley Communications, Inc., located in a remote area of Utah, made a special device that was used in 4th generation cell phones. After three years of local operations, the company that employed 4,000 people was planning to close its Utah operation and move the assembly offshore. Under the direction of a financial services company that financed the deal, the employees agreed to become owners of the company and continue to operate the business. The business concept that describes this arrangement is:

Answer 1

Answer: Leveraged buyout

Explanation:

leveraged buyout is a system of business concept that describes an acquisition of a company done by debts. Where a company acquires another through borrowing money to match the cost of the company being bought. Company assets are often used as loan for collateral in this case and they are often used to trade the profit of many private equity firms.

This is what the employees at Hidden Valley Communications, Inc. did.