In a Leveraged Buyout (LBO)

Multiple Choice

In a Leveraged buyout (LBO) :

A) an acquiring company uses a great deal of debt to acquire a debt free target.
B) private investors buy the company's stock using debt that's secured by the firm's own assets.
C) the target's debt is eliminated by the buyer's leverage resulting in a debt free company.
D) the buyers purchase the stock with their own money which leaves them free to borrow heavily using their stock as collateral.