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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 32 of 56

Why should operating leases be capitalized and treated like debt when calculating multiples?

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

To inflate EBITDA and produce a higher valuation

B

To ensure comparability between firms that lease assets versus those that own them

C

Because tax authorities require it for all transactions

D

Because operating leases are non-operating assets