medium · Debt Capital Markets bond-instruments-structures
A leveraged buyout (LBO) is structured with $600 million of debt and $400 million of sponsor equity. The debt consists of a $400 million Term Loan B at L+350 bps and $200 million of Senior Notes at 9.00%.
If the current LIBOR (reference rate) is 3.00%, what is the weighted average cost of debt (WACD) for the transaction?
- 7.33%
- 6.50%
- 7.75%
- 4.40%
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