easy · Corporate Credit Analysis
A company uses $100 million of revolving credit to fund a $100 million acquisition.
What is the impact on Gross Debt and Net Debt?
- Neither increases because the acquisition adds EBITDA.
- Gross Debt increases by $100 million, but Net Debt remains unchanged.
- Both Gross Debt and Net Debt increase by $100 million.
- Gross Debt increases by $100 million, while Net Debt decreases by $100 million.
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