medium · Corporate Credit Analysis distressed
In a 'loan-to-own' strategy, an investor buys Unsecured Notes at 20 cents on the dollar.
If the notes are the fulcrum and convert to 100% of the equity in a company worth $300 million after debt, and the notes had a $500 million face value, what is the investor's profit per dollar of face value?
- 40 cents
- 80 cents
- 10 cents
- 60 cents
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