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30 April, 06:48

Which of the following best describes a leveraged buyout fund's acquisitions? a. Investing in early stage businesses b. Investing in mid-sized businessesc. Investing in foreign businesses

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  1. 30 April, 07:08
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    The best describes a leveraged buyout fund's acquisitions is Investing in mid-sized businesses.

    Explanation:

    A leveraged buy (LBO) is a takeover of another company which is spending a substantial amount of money to offset the acquisition cost. In addition to the acquired company's assets, assets are often used as collateral for the loans.

    One of the largest LBOs reported in 2006 was Kohlberg Kravis Roberts & Co. (KKR), Bain & Co., and Merrill Lynch's takeover of Hospital Corporation of America (HCA).

    In leveraged buy-outs (LBOs), the ratio of debt to equity is usually 90% to 10%.
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