When a private equity firm purchases the outstanding equity of a publicly traded firm (thereby taking the companyprivate) and finances the transaction primarily with debt, the transaction is called a(n):Select one correct answer:Leveraged buyoutPrivate leveraged transactionInitial public offeringCash offer

Leveraged buy out : For acquisition of a company by financing this transaction through debt is…

Answered: When a private equity firm purchases…

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter15: Harvesting The Business Venture Investment

Section: Chapter Questions

Problem 10DQ

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Similar questions

When an investment banker purchases an offering froma bond issuer and then resells it to the public this is known as a: A. Rights offering B. Private placement C. Firm commitment D. Best Efforts E. Standby offering
Differentiate between an IPO and a seasoned equity offering
What is the purpose of an initial public offering (IPO)? How does an investment bank facilitate the process? List and describe several recent IPOs. Discuss the advantages and disadvantages of an IPO.
Which of the following would NOT be considered a secondary market transaction? Select one: O a. A buy order to a dealer for outstanding bonds of a company trading OTC. O b.A buy order to an investment banker for a new IPO stock offering. O CA buy order to a broker for shares of stock in a company on NYSE.
Which one of the following has the potential to allow for the greatest amount of off-balance-sheet financing for the investor? Group of answer choices Equity method Equity method with special purpose entities Mark-to-market accounting Consolidation accounting
Which of the following is not a way that a firm might seek to raise new capital?a. Initial Public Offering (IPO)b. Rights issuec. Stock splitd. Seasoned Equity Offering (SEO)e. All of the above are ways that a firm might seek to raise new capital
Which type of financial market transaction occurs when a company sells stock directly to the public for the first time? a) Secondary market transaction b) Private placement c) Initial Public Offering (IPO) d) Seasoned equity offering
This allows firm to issue public equity very quickly and often at lower costs as long as they are pre-authorized to do so SEO Shelf registration Private placement Securitization Syndicated loans Project financing
1. Kind according to purpose (Choose 1) a. Horizontalb. Verticalc. Product Extentiond. Market Extensione. Congenericf. Conglomerate 2. Kind according to approach to the target firm (Choose 1)a. Friendlyb. Hostile 3. Kind according to acquisition mode (Choose 1) a. Cashb. Equity swapc. Mix of cash and equity swap
Which of the following is a cost associated with an IPO? Interest expenses Out-of-pocket expenses Cost of debt Dividend payments
The following terms were introduced in this chapter: Strategic investments Non-strategic investments Investments at fair value through profit or loss (FVTPL) Investments at amortized cost (AC) Match each term with the following definitions: _________ Debt securities that are held to earn interest income _________ Investments purchased to influence or control another company _________ Debt or equity investments that require holding gains or losses to be included in the determination of the company’s profit or loss. _________ Investments purchased mainly to generate investment income
Question 1 LBO funds exit their investments primarily through the IPO process. O True O False

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