What is an lbo what are the risks for the equity, Ask an Expert

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What is an LBO? What are the risks for the equity investors and what are the potential rewards?

A term leveraged buyout is a purchase of a publicly owned corporation through a small group of investors by using a large amount of borrowed money. The risks for the equity investors are those which exist when a high degree of financial leverage exists. Thus too are the rewards in which small returns become large returns due to leverage.

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Financial Management, Finance

Category:- Financial Management
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