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Leverage

The amount of debt versus underlying asset value.

This leads to the term "Leveraged Buy Out" (LBO) where debt is used to buy a company. This strategy is popular with Private Equity houses, splitting commentators into two separate camps. Supporters believe it forces the object of the LBO to behave more efficiently to pay off its debt, thus maximising investor value. Nay-sayers believe it is capitalism at its worst leading to asset stripping, mass redundancies and obscene bonuses for the locust-like heads of the Private Equity houses.

But then nobody's perfect.

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