Question 14, Financial maintenance covenants are typical for ____________, while _____________________ typically have incurrence covenants.

a.Public companies; private companies

b. Bank debt; high yield bonds

c. Private companies; public companies

d. High yield bonds; bank debt

Question 12, The ability to maximize leverage in an LBO transaction is facilitated for a company with which of the following characteristics?

a. Tight covenant package

b. Large debt balance

c. Strong asset base

d. Track record for bolt-on acquisitions

Question 11, With financial maintenance covenants, leverage ratios typically _______ throughout the life of the loan, while coverage ratios typically ____________.

a. Decrease; increase

b. Stay constant; decrease

c. Stay constant; increase

d. Increase; decrease

Question 10, What percent of a sponsors existing equity ownership in the target is kept following a dividend recapitalization?

a. 50%

b. 100%

c. 80%

d. 90%