100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
LBO Modeling Q&A Bundle £43.07   Add to cart

Package deal

LBO Modeling Q&A Bundle

Master LBO Modeling with Our Ultimate Q&A Bundle!

28 items

LBO- IRR Calculations Review Questions and Correct Answers

(0)
£7.31

1. How do you calculate the internal rate of return (IRR) in an LBO model, and what does it mean? The IRR in an LBO is "the effective annual compounded interest rate": For example, if you invest $100 in the beginning and get back $200 after 5 years, what interest rate would turn that $100 into $20...

View example

NEW BIWS LBO TEST QUESTIONS SND CORRECT ANSWERS

(0)
£8.12

What is a leveraged buyout, and why does it work? PE firm acquires a company using a combination of Debt and Equity, operates it for several years, and then sells the company at the end of the period to realize a return on its investment. During the period of ownership, the PE firm uses the company...

View example

LBO Interview Studying Practice Questions and Correct Answers

(0)
£8.93

LBO Acquisition of a company by an investor group Purchase price financed by debt PE firm uses the company's cash flows to pay interest expense on the debt and to pay off the debt principal LBO valuation represents the maximum amount a sponsor can pay in order to achieve its required return object...

View example

Leveraged Buyouts and LBO Models - IRR Calculations Q&A

(0)
£7.31

1. How do you calculate the internal rate of return (IRR) in an LBO model, and what does it mean? The IRR in an LBO is "the effective annual compounded interest rate": For example, if you invest $100 in the beginning and get back $200 after 5 years, what interest rate would turn that $100 into $20...

View example

LBOs Practice Exam Questions and Correct Answers

(0)
£12.18

Unfunded Revolver Revolver still available (ie hasnt been taken out) OID Discount on debt so OID= (100-price)/100*FV it means that to buy $100 of Face Value of the Term Loan, lenders would only have to give us $99 in cash. This $1 difference is amortized over time or when the loan is repaid BOP B...

View example

BIWS LBO Advanced- Review Questions and Correct Answers

(0)
£7.31

2. Wait a minute, how are Call Protection and "Prepayment" different? Don't they refer to the same concept? Call Protection refers to paying off the entire debt balance, whereas "Prepayment" refers to repaying part of the principal early, before the official maturity date. 3. What are some exa...

View example

LBO Technicals Study Questions and Correct Answers

(0)
£8.12

What is a leveraged buyout (LBO)? In a leveraged buyout, a private equity firm (often called the financial sponsor) acquires a company with most of the purchase price being funded through the use of various debt instruments such as loans, bonds. The financial sponsor will secure the financing packag...

View example

LBO Practice Test Questions and Correct Answers

(0)
£7.31

Leveraged Buyout (LBO) an attempt by employees, management, or a group of investors to purchase an organization primarily through borrowing (debt) total debt capacity Debt capacity refers to the total amount of debt a business can incur and repay according to the terms of a debt agreement this is ...

View example

LBO Practice Exam Questions and Complete Solutions

(0)
£9.74

What is private equity? Private equity is equity capital that is not quoted on a public exchange. Private equity consists of investors and funds that make investments directly into private companies or conduct buyouts of public companies that result in a delisting of public equity Capital for priv...

View example

LBO (Advanced) Practice Questions and Correct Answers

(0)
£8.12

Tell me about the different types of debt you could use in an LBO. Revolver TLA TLB Senior Notes Subordinated Notes Mezzanine Each type of debt is arranged in order of rising interest rates - so the Revolver has the lowest interest rates, Term Loan A is slightly higher, B is slightly higher, Senior...

View example

LBO Valuation Crash Course Questions and Correct Answers

(0)
£8.12

What is multiple Expansion? Basically when a company valuation increase with the EBITDA not changing What is Internal Rate of Return? A time-weighted metric that tells you what your compounded rate of return would be if you invested your money today and it grew at that rate over your investment hor...

View example

Investment Banking Set- Leveraged Buyout (LBO) Questions and Correct Answers

(0)
£7.31

Leveraged Buyout - LBO • An LBO is an acquisition of a target using primarily debt to finance the purchase • You buy a company using leverage, pay down debt with FCF and then hope to sell it later at a higher EBITDA multiple • Debt can be 60-70% of purchase price • LBOs can generate inves...

View example

Paper LBO Practice Questions and Complete Solutions

(0)
£7.31

What will you be given in a paper LBO? 1) Capital Structure (% debt vs. equity) for leverage 2) Duration of investment for IRR estimation 3) Projected EBITDA for FCF (may be given in the form of revenue, growth rate and margins) 4) Depreciation and amortization expense for tax calculation 5) Cost of...

View example

LBO and Merger Test Questions and Complete Solutions

(0)
£7.71

What are the differences between DCF and LBO cash flows? LBO cash flows are levered. They have interest expense accounted for while DCF cash flows generally do not. LBO cash flows also generally have a scheduled amortization of debt taken out. How do you increase your return in an LBO? More debt, e...

View example

LBO Study Questions and Complete Solutions

(0)
£7.31

Changes That Increase IRR Lower Purchase Price, Less Equity, Higher Revenue Growth, Higher EBITDA Margins, Lower Interest Rates, Lower CapEx Changes That Reduce IRR: Higher Purchase Price, More Equity, Lower Revenue Growth, Lower EBITDA Margins, Higher Interest Rates, Higher CapEx What is a levera...

View example

LBO Practice Test Questions and Correct Answers

(0)
£9.74

What is an LBO? When firm acquires a company using a combination of debt and minimal equity, operates it for several years and then sells it. With leverage amplifying returns. Why would you use leverage when buying a company? 1) To amplify returns. 2) Have capital available for other purchases Rem...

View example

LBO/Merger/Restructuring Test Questions and 100% Correct Answers

(0)
£7.71

What is a merger model used for? A merger model is used to look at when one company acquires another whether or not the proforma EPS is greater than the buyer's standalone EPS To do this you have to make assumptions about the purchase price / premium, the form of consideration, the interest rate o...

View example

Chapter 5 (LBO Analysis) Review Questions and Correct Answers

(0)
£7.31

What are the primary functions of LBO analysis? On the financing side, the banker uses LBO analysis to help craft a viable financing structure for the target, which encompasses the amount, type, and terms of debt, as well as the equity contribution. In an M&A advisory context, the banker uses LBO an...

View example

LBO (PE Questions) with 100% Correct Answers

(0)
£7.31

Can you walk me through how you might make an investment decision based on the output from an LBO model? 1) Determine investment criteria (IRR and MoM multiple) 2) Build projections and look at LBO model output for Base Case. If numbers work, build projections for Downside Case 3) Back up decision w...

View example

Study Questions and Correct Answers for LBO Modelling

(0)
£12.18

Why do PE firms use leverage when buying companies? Amplify returns using leverage Less capital upfront => greater upside potential + greater risk Walk me through a basic LBO model 1. Make assumptions about purchase price, funding sources, interest rate on debt, and growth 2. S&U to back into Eq...

View example

Leveraged Buyouts and LBO Models - Financial Statement and Debt Projections Questions and Correct Answers

(0)
£7.31

1. Can you explain how to adjust the Balance Sheet in an LBO model? The adjustments are similar to those in an M&A deal, but in an LBO, you don't "combine" the Seller's Balance Sheet with the Buyer's since the "Buyer" is an empty shell corporation. You still write down the company's Shareho...

View example

Leveraged Buyouts and LBO Models - The Purchase Price, Debt, and Sources & Uses Schedule Q&

(0)
£7.31

1. What's the true purchase price in a leveraged buyout? Just as in a merger model, you always start with the Equity Purchase Price - the cost of acquiring all the company's common shares. Then, depending on the treatment of Cash, Debt, Transaction Fees, and Equity Rollovers, the "true price" m...

View example

Leveraged Buyouts and LBO Models - Exit Strategies Questions and Correct Answers

(0)
£7.31

1. What are the different exit strategies available to a private equity firm in a leveraged buyout, and what are the advantages and disadvantages of each one? The main exit strategies are an M&A deal, an initial public offering (IPO), and a dividend recapitalization. In an M&A Deal, the PE firm sel...

View example

IBIG-04-07-Leveraged-Buyouts-LBO-Models Test Questions and Correct Answers

(0)
£8.12

Walk me through a basic LBO model What are its most important levers? Step 1: Determine purchase price and D/E ratio Step 2: Create a S&U table and PPA schedule Step 3: Adjust the company's balance sheet Step 4: Project debt repayments based on FCF Step 5: Make exit assumptions, find IRR/MoM Purc...

View example

LBO Advanced Questions and 100% Correct Answers

(0)
£7.31

1. How could you determine how much debt can be raised in an LBO and how many tranches there would be? Usually you would look at recent, similar LBOs and assess the debt terms and tranches that were used in each transaction. You could also look at companies in a similar size range and industry, see ...

View example

LBO Analysis Practice Exam Questions and 100% Correct Answers

(0)
£8.93

What are characteristics of a good candidate for an LBO? Steady Cash flows Limited Business Risk Low CAPEX / Working Capital Strong Management Opportunity for Cost Reduction High asset base value Low R&D Steady industry What are some way to increase the IRR of an LBO? Reduce the purchase Price Incr...

View example

LBO Modeling Test Questions and 100% Correct Answers

(0)
£6.90

Net working capital = receivables + inventory - payables Receivables days = receivables/sales x 365 Inventory days = inventory/cogs x 365 Payables days = payables/cogs x 365 Capex is estimated as a % of sales, unless there is a more reasonable method Depreciation is estimated from a capex/depre...

View example

LBO Modeling Review Questions and 100% Correct Answers

(0)
£8.12

Sections Transaction assumptions, income statement, working capital schedule, balance sheet, statement of cash flows, debt schedule, interest expense schedule, credit metrics, returns calculations Transaction assumptions: Sections Sources & uses, transaction assumptions, financing assumptions, purc...

View example
Show all
avatar-seller

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller twishfrancis. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for £43.07. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

75323 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy revision notes and other study material for 14 years now

Start selling
£227.74 £43.07
  • (0)
  Add to cart