hard · Private Credit & Debt
An LBO candidate is being evaluated using a 'Back-of-the-envelope' analysis.
If the target has $80,000,000 in EBITDA, a minimum interest coverage ratio (ICR) of 2.0x, and a blended interest rate of 7%, what is the maximum debt supportable by the cash flow?
- $285,714,286
- $400,000,000
- $571,428,571
- $1,142,857,143
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