--%>

Explain LBO-risks for equity investors and potential rewads

Explain LBO? Describe risks for the equity investors and also describe potential rewards?
A leveraged buyout is purchase of 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 whenever a high degree of financial leverage exists. Therefore too are the rewards, where small returns become large returns due to leverage.

   Related Questions in Finance Basics

  • Q : Explain Administratively Established

    Administratively Established Positions: The positions authorized by the Department of Finance throughout a fiscal year that were not comprised in the Budget and are essential for workload or administrative reasons. These positions fin

  • Q : What are Feeder Funds Feeder Funds :

    Feeder Funds: For lawful basis accounting purposes, funds into which some taxes or fees are deposited on collection. In some situations administrative costs, collection expenses, and refunds are paid. The balance of such funds is transferable at any t

  • Q : Explain Detailed Budget Adjustments

    Detailed Budget Adjustments: Department Detailed Budget Adjustments are comprised in department budget displays to give the reader a snapshot of proposed expenses and position adjustments in the department, why tho

  • Q : Short run and long run influence Normal

    Normal 0 false false

  • Q : What is Expenditure Authority

    Expenditure Authority: The authorization to make expenditure (generally by a budget act appropriation, provisional language or some other legislation).

  • Q : Emergency Banking Act What did the

    What did the Emergency Banking Act do?

  • Q : Four major phases of the business cycle

    Normal 0 false false

  • Q : Influence the economy in short run and

    Normal 0 false false

  • Q : Frauds in banks Frauds in banks : In

    Frauds in banks: In today’s world all the financial institutions face a major problem of security in banking operations. Today it is a challenge in front of ever bank to secure its functioning and avoid the fraudulent practices in their banks. I

  • Q : Advantages of finger prints biometric

    Advantages of finger prints biometric technique: Easy to use and very little training is used No space is required for the installation Large amounts of existing data to allow background list check Has proven effect