easy · Investment Banking ma-lbo
In an LBO debt schedule, if the 'Cash Flow Sweep' mechanism is active, how is excess cash typically allocated after mandatory payments?
- It is used to buy back shares held by minority interest holders
- It is retained as cash on the balance sheet to build up liquidity
- It is distributed as a dividend payment directly to the private equity sponsor
- It is used for optional prepayment of the most senior debt tranches.
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