medium · Corporate Credit Analysis
A borrower has $400 million in debt and $80 million in LTM EBITDA. It pays a $50 million dividend funded by cash on hand (reducing available cash from $70 million to $20 million).
If the Net Leverage covenant is 5.50x, how many turns of cushion remain after the dividend?
- 0.75x
- 1.50x
- 4.75x
- 1.38x
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