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