Often used in risk arbitrage. A public company takes on significant additional debt with the purpose of either paying an extraordinary dividend or repurchasing shares, leaving the public shareholders with a continuing interest in a more financially leveraged company. Popular form of shark repellent See: Stub.
Nearby TermsLeveraged loan Leveraged portfolio Leveraged recapitalization Leveraged required return Leveraged stock
Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University