easy · Investment Banking ma-lbo
A financial sponsor performs a dividend recapitalization by issuing 400 million of new debt to pay themselves a 400 million dividend.
What is the immediate impact on the company's Enterprise Value and Equity Value?
- Enterprise Value decreases by 400 million; Equity Value increases by400 million
- Enterprise Value increases by $400 million; Equity Value is unchanged
- Both Enterprise Value and Equity Value are unchanged
- Enterprise Value is unchanged; Equity Value decreases by $400 million
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