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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 23 of 50

Put the layers of an LBO capital structure in order from the lowest risk / first to be repaid to the highest risk / last to be repaid.

Drag the steps into the correct order. You can also use the arrow buttons.

Order the process: arrange every step from first to last, then check your answer.
1

Ordinary equity

2

Senior debt

3

Subordinated loans / preference shares (fixed return instrument)

4

Junior debt (second lien, mezzanine, high yield)