leveraged-buyout-structure

Vocabulary Word

Definition

'Leveraged buyout structure' refers to a financial method where you buy a company using borrowed money, usually from bonds or loans. A key feature is that the company you're buying is expected to pay back the loan.

Examples in Different Contexts

In corporate finance, 'leveraged buyout structure' encompasses the terms, conditions, and sources of financing for a buyout. A CFO might discuss, 'We need to carefully consider the leveraged buyout structure to balance our growth objectives with manageable debt levels.'

Practice Scenarios

Accounting

Scenario:

We need to understand the implications of these financial methods in our books. Let's look at some scenarios for an acquisition.

Response:

Yes, we should understand the financial effect of a leveraged buyout structure before going ahead with the acquisition.

Business

Scenario:

We should consider different strategies for this deal. Debt financing is an option if used wisely.

Response:

Debt financing sounds viable. We could consider a leveraged buyout structure, where we can use the company's own assets as collateral.