Question: Private Equity often involves taking on a large amount of debt, purchasing a company, improving it, and then selling it back to the market, using
Private Equity often involves taking on a large amount of debt, purchasing a company, improving it, and then selling it back to the market, using the leverage of the debt to magnify the returns. Thinking about the high risk of leverage and the cost of improvements - such as $23 million for a new point-of-sale system - why do you think Private Equity prefers businesses with stable cash flows, such as supermarkets?
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