Word: opm
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Dates: during 2001-2001
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Leverage--popularized in the '80s as OPM (other people's money)--is what makes LBOs work. Think of it like this: You buy a house for $200,000 with 20% down, or $40,000. Say you later sell the house for $400,000. Your profit is $200,000 on a $40,000 investment. That's a fivefold return on a property that merely doubled in value. Now imagine the math if you put down only 5%, which is how raiders...