Chapter 13: Financing the Deal and (LBO's). This takeover structure is used but not limited by private equity firms when taking over a company using heavy leverage along with some equity. This excessive leverage can magnify financial returns and also increase risks. Assets are usually acquired and used as collateral for the extensive loans that are taken out. RJR Nabisco was one the largest LBOS in history. This is an Important topic in Mergers!

Provide your thoughts about the LBOs method of financing deals. Are they successful and why do they create value, downside risks, costs, tax Issues, deal structures and many other examples along with an advantages along with a risk. In order to give everyone a chance, dont answer all of these, which are just some examples where you can take any ONE item (or provide another) about LBOs to discuss. This can also include an example of a company currently undergoing or has undergone an LBO in the real world.

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Chapter 14: Applying Financial Models: There are many financial models that that add deal with valuation structuring in financing deals in M&As. The purchase of stock of an entity for cash/stock combination discuss is one of the most common. There is a breakdown of the 4 steps on stock purchases used in financial models that also include sub steps in the chapter. You may select any one of those or indroduce your own and discuss one advantage and disadvantage. Try to incorporate a real example.