medium · Debt Capital Markets
In a 'Net Leverage' test, how would the receipt of $100 million in cash from an asset sale affect the ratio, assuming the debt remains unchanged?
- Net Leverage is unaffected by cash balances
- It would likely decrease the ratio, as the cash 'netted' against debt offsets the lost EBITDA
- It would always increase the ratio
- It depends on whether the cash is held in a domestic or foreign bank account
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