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Basic Question 13 of 16
A common exit strategy of private equity firms is to sell the company to another private equity firm. This is referred to as:
B. recapitalization.
C. secondary sales.
A. trade sale.
B. recapitalization.
C. secondary sales.
User Contributed Comments 1
| User | Comment |
|---|---|
| Murtadha | A trade sale is the sale of a company to a strategic buyer, usually a competitor while a secondary sale is a sale to another private equity firm or group of investors. The key term that differentiates between the two definitions is 'competitor'. |
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Learning Outcome Statements
explain features of private equity and its investment characteristics
CFA® 2024 Level I Curriculum, Volume 5, Module 3.