Leveraged Buyouts (LBOs): CNBC Explains

In some acquisitions, leveraged buyouts may be the best financing option for both the buyer and seller of a company. Leveraged buyouts utilize borrowed money to finance a deal. They’re attractive to investors because they reduce their amount of initial investment and may result in higher percentage yields. Salman Khan of the Khan Academy explains.

From this video, you’ll understand:

  • The rationale for leveraged buyouts
  • How return on investment can be increased by engaging in an LBO