Question: Leverage and return on equity You are a private equity investor completing the acquisition of a company and are currently determining the optimal amount of
Leverage and return on equity
You are a private equity investor completing the acquisition of a company and are currently determining the optimal amount of debt and equity you will use to finance the company.
The purchase price of the company is $ You plan to resell the company in a year. Its value then is uncertain, but you expect it to be $
After talking to prospective debt investors and analyzing the risk of the company's assets and cash flow you will use to repay them, you have summarized your debt options as:
tableOption # Option # Option #Debt amount,$$$
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