hard · Corporate Credit Analysis
A sponsor-owned company is performing a 'Dividend Recap' by issuing $200 million in new debt to pay a dividend. Pre-transaction, EBITDA is $100 million and Net Debt is $400 million.
If the exit multiple is 8.0x, how much 'Equity Cushion' is lost in terms of enterprise value percentage?
- 20%
- 10%
- 25%
- 50%
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