Latent debt capacity hypothesis
A theory that postmerger increases in financial leverage are due to underleverage in the premerger period.

Learning-by-doing
A means of transferring knowledge that is complex or embedded in a complex set of technological and/or organizational circumstances and thus difficult or impossible to transfer in a classroom setting. May motivate knowledge acquisition joint ventures.

Learning curve
An approach to strategy formulation that hypothesizes that costs decline with cumulative volume experience, resulting in competitive advantage for the first entrants into an industry.

Leveraged buyout (LBO)
The purchase of a company by a small group of investors, financed largely by debt. Usually entails going private.

Leveraged cash-out (LCO)
See Leveraged recapitalization.

Leveraged ESOP
An employee stock ownership plan recognized under ERISA in which the ESOP borrows funds to purchase employer securities. The employer then makes tax-deductible contributions to the ESOP sufficient to cover both principal repayment and interest on the loan.

Leveraged recapitalization
A defensive reorganization of the firm's capital structure in which out- side shareholders receive a large, one-time cash dividend and inside shareholders receive new shares of stock instead. The cash dividend is largely financed with newly borrowed funds, leaving the firm highly leveraged and with a greater proportional ownership share in the hands of management. Also called leveraged cash-out.

Life cycle model of firm ownership
A theory that suggests that firms will attract different shareholder clienteles (high- or low-tax bracket investors) over different periods of firm development depending on changing investment nee~ and profitability.

Line and staff
An organizational form characterized by the separation of support activities (staff) from operations (line).

Liquidation
Divestiture of all the assets of a firm so that the firm ceases to exist.

Liquidation MLP
The complete liquidation of a corporation into a master limited partnership.

Lock-in amendment
A corporate charter amendment that makes it more difficult to void previously passed (antitakeover) amendments (e.g., by requiring supermajority approval for a change).

Lock-up option
An option to buy a large block of newly issued shares that target management may grant to a favored bidder, thus virtually guaranteeing that the favored bidder will succeed. Target management's ability to grant a lock-up option induces bidders to negotiate.

Logical incrementalism
A process of effecting major changes in strategy via a series of relatively small (incremental) changes.

 

資料來源：J. Fred Weston, Mark L. Mitchell, and J. Harold Mulherin, “Takeovers, Restructuring, and Corporate Governance”, Forth Edition, Pearson Educational International