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High

A company may acquire another company by issuing high-yield, high interest debt known as "junk" bonds to raise funds for a leveraged buyout. High-yield debt refers to bonds that pay higher interest rates because they are rated below investment grade due to having a higher risk of default. The acquiring company takes on significant debt to finance the purchase, hoping increased profits from the acquisition will allow it to repay the debt over time.

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19 views1 page

High

A company may acquire another company by issuing high-yield, high interest debt known as "junk" bonds to raise funds for a leveraged buyout. High-yield debt refers to bonds that pay higher interest rates because they are rated below investment grade due to having a higher risk of default. The acquiring company takes on significant debt to finance the purchase, hoping increased profits from the acquisition will allow it to repay the debt over time.

Uploaded by

ChahatBhattiAli
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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High-yield

In some cases, a company may acquire another company by issuing high-yield debt
(high interest yield, "junk" rated bonds) to raise funds (often referred to as a
leveraged buyout). The

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