Leveraged Buyout — acquisition of a target company financed predominantly with debt secured against the target's own assets and cash flows. Typical middle-market capital structure (per Table 1.1): first-lien senior sim 3.0–4.5× EBITDA, second-lien or mezzanine 0–1.5×, sponsor equity sim 40%–50% of total enterprise value. The sponsor's return is amplified by the leverage ratio: R_E = R_A + L · (R_A - r_b).