Private Equity

Lecture 5-6: Deal Structuring (Financing)

Comprehensive exam-prep quiz covering leveraged finance: sources and uses of funds, management incentives and equity structuring, the leverage effect on EV and equity, key factors determining leverage, LBO debt structures, loan underwriting options, and loan agreements.

Question 19 of 50

According to the lecture's leverage-effect-on-equity analysis, which statements are correct when comparing a leveraged buy-out with an all-equity purchase of the same company?

Select every statement that applies.

Leverage changes the Enterprise Value via the EV/EBITDA multiple

The absolute (euro) equity value creation is lower in the leveraged case

Leverage produces a significant uplift in the percentage return and IRR on equity

With debt at a 15% cost and no cash generation, the equity IRR simply equals the growth rate of EV

Current Quiz

Question Map

19 / 50 active