medium · Private Equity
During an LBO valuation, an analyst uses the Adjusted Present Value (APV) method. The Unlevered EV is $1,000M. The company has $500M in debt at a 6% interest rate and a 30% tax rate.
If the debt is permanent, what is the total EV including the tax shield?
- $1,030M
- $1,500M
- $1,150M
- $1,000M
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