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Private Equity

Lecture 7 - 8: Valuation, LBO Model, Exit

Quiz covering LBO structure and lender protection, financial covenants, the maximum leverage exercise, dividend recaps, valuation methodologies and multiples, the LBO model build and returns breakdown, and exit routes.

Question 2 of 56

Which characteristic best describes senior debt in an LBO structure?

Pick one: press 1-4 on your keyboard or click an option.
A

The residual claim that absorbs losses first

B

Highest cost layer, with interest that can be accrued rather than cash paid

C

Lowest risk, first-ranking security, lowest cost, and always fully cash paid

D

A debt/equity hybrid instrument such as a preference share