Which of the following are steps often found in developing a LBO model?
A) Cash flow projections
B) Determining a firm's borrowing capacity
C) Determining a financial sponsor's equity contribution
D) A, B, and C
E) A and C only

Question

Quizplus · Accepted Answer

Developing a LBO model typically involves cash flow projections to determine if the leverage taken on to buy a company can be serviced, determining a firm's borrowing capacity based on its cash flow and assets as collateral, and determining a financial sponsor's equity contribution to the purchase price. Therefore, all of the choices are steps often found in developing a LBO model.

Which of the Following Are Steps Often Found in Developing