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Question:

The mezzanine financing portion of a leveraged buyout (LBO) is most likely to:

A be convertible to equity or include warrants.
explanation

In the context of an LBO, mezzanine financing refers to debt that carries warrants or equity conversion features. This debt is typically subordinated to other bonds that are issued to finance the LBO. Committed capital is the investment of limited partners in a private equity fund and does not include debt that the fund issues to finance a particular LBO.

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