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|Title:||Can Tech and Debt Ever Marry? The Future of Leveraged Buyouts in the 21st Century|
|Abstract:||This paper empirically examines the impact of debt on leveraged buyout performance. Research suggests that the use of debt financing to purchase a company can increase the value of the firm by improving corporate investment behavior and providing tax shields on interest payments. However, such a result depends on the underlying characteristics of the target company. Building from existing literature that suggests that leverage can lead high-growth firms to pass up value-creating projects, ultimately destroying firm value, I examine the impact of debt on returns to investors from leveraged buyouts of companies in the technology sector. I find that having greater leverage decreases the returns to buyouts of technology companies.|
|Type of Material:||Princeton University Senior Theses|
|Appears in Collections:||Economics, 1927-2016|
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|Economics_Senior_Thesis_Submission_Click_Here_To_Submit_dstearns_attempt_2016-04-13-01-45-18_Stearns_Devin.pdf||692.66 kB||Adobe PDF||Request a copy|
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