Tim and Andy,wealthy industrialists,borrow money from True Global Bank to acquire Univo Corp.They promise to repay the bank using the assets of Univo Corp.as collateral.In this scenario,Tim and Andy are involved in a:

A) horizontal merger.
B) vertical merger.
C) leveraged buyout.
D) conglomerate merger.
E) poison pill.

Question

Angelo Almazan · Accepted Answer

Final Answer : C, Explanation :  This scenario describes a leveraged buyout (LBO), where Tim and Andy are borrowing money to acquire another company, Univo Corp., and are using the assets of the company they are acquiring as collateral for the loan.

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