LBO MODEL EXAM QUESTIONS AND VERIFIED COMPLETE ANSWERS GRADED A++ LATEST UPDATE
2 views 0 purchase
Course
LBO
Institution
LBO
LBO MODEL EXAM QUESTIONS AND VERIFIED COMPLETE ANSWERS GRADED A++ LATEST UPDATE
how to PE firms make money?
buying businesses with a combination of cash and more importantly, debt raised from investors
spending on average 3-5 years to make improvements to the business (increase growth and/or...
lbo model exam questions and verified complete ans
Written for
LBO
All documents for this subject (88)
Seller
Follow
LIXAN
Reviews received
Content preview
LBO MODEL EXAM QUESTIONS AND VERIFIED
COMPLETE ANSWERS GRADED A++ LATEST UPDATE
how to PE firms make money?
buying businesses with a combination of cash and more importantly, debt raised from
investors
spending on average 3-5 years to make improvements to the business (increase growth
and/or improve margins), while using the cash flow to make interest payments
selling the business for a higher price through M&A or IPO, and then repaying the
balance of the debt with the proceeds
why do PE firms use debt in all of their deals?
because cash today is worth more than cash tomorrow, so they would rather borrow
money than have less cash today
How do you make money in a LBO?
the business generates cash flow, which is used to pay down the debt, so the PE firm's
ownership in the company increases.
As the business improves its growth rate and/or margins, it can be sold for a higher
multiple than it was purchased for
what makes a good LBO candidate?
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller LIXAN. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $8.99. You're not tied to anything after your purchase.
