Various factors contribute to the level of debt financing used in leveraged buyouts. This paper examines the relationship between levels of buyout debt with two different categories of determinants. These determinants are broken into factors exogenous and endogenous to leveraged buyouts. Exogenous factors include credit market conditions along with industry and region of the acquired firm, while endogenous factors are firm specific, such as profitability, operating efficiency, and previous capital structure of target firms. Previous literature found that credit market conditions are the only significant indicator of debt in leveraged buyouts. This paper uses quantitative methods to show that firm specific metrics do in fact have significant relationships with buyout debt and can predict debt levels in leveraged buyouts.
"The Colorado College Investment Club was established in December of 2003 and was entrusted with the management of the Investment Club’s own portfolio. This portfolio was funded through the generosity of private investors...The Investment Club is a student run organization that educates members about the financial markets, investing, and portfolio management."--p. 3