The target company has an estimated enterprise value of $50 million and its EBITDA is $12 million.
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The target company has an estimated enterprise value of $50 million and its EBITDA is $12 million. You estimate that, in an LBO, you are able to raise 3x EBITDA in debt to finance the purchase. If debt and sponsor equity are the only sources of financing,
How much sponsor equity do you need for the LBO? Assume that there are no transaction costs.
Expert Answer:
If the enterprise value of the target company is 50 million and its EBITDA is 12 million then the E... View the full answer
Related Book For 
Valuation The Art and Science of Corporate Investment Decisions
ISBN: 978-0133479522
3rd edition
Authors: Sheridan Titman, John D. Martin
Posted Date:
