medium · Corporate Credit Analysis
A borrower has a 4.5x total leverage incurrence test. Current debt is $900 million. LTM EBITDA is $250 million. The company acquires a competitor for $300 million, funded with 50% debt and 50% equity. The target has $40 million EBITDA.
What is the pro-forma leverage?
- 4.14x
- 3.10x
- 3.62x
- 4.20x
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