Empirical F acts. True or false? a. One of the first tasks of an LBO’s financial manager is to pay down debt. b. Shareholders of bidding companies earn higher abnormal returns when the merger is fi-...

Empirical




F


acts.



True or false?

a. One of the first tasks of an LBO’s financial manager is to pay down debt.

b. Shareholders of bidding companies earn higher abnormal returns when the merger is fi- nanced with stock than in cash-financed deals.

c. Targets for LBOs in the 1980s tended to be profitable companies in mature industries with limited investment opportunities.