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Private Equity

Lecture 9 - 10: LBO Model, EV to Equity and Exit

Comprehensive quiz covering LBO model construction, types of EBITDA, value creation strategies, the EV-to-Equity bridge, net debt and working capital adjustments, completion mechanisms (locked box vs. completion accounts), governance, and exit routes.

Question 16 of 52

Under an Enterprise Value offer, why does the purchase price for the shares depend on more than just the agreed EV?

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

Because cash and working capital are irrelevant to an EV offer

B

Because the Enterprise Value itself is recalculated each day until completion

C

Because EV is a fixed agreed price based on certain working capital assumptions, while net debt — influenced by changing working capital — can change up to the effective date

D

Because the seller can unilaterally adjust the equity value after signing