medium · Private Equity
An LBO target generates $40M in EBITDA. The acquisition is financed with 6.0x total leverage at a weighted average interest rate of 8%.
What is the company's Interest Coverage Ratio?
- 2.50x
- 1.50x
- 3.20x
- 2.08x
Sign up free to see the explanation and track your rank →
More Private Equity practice
- If the GP receives a 20% carry on the profit from Deal A immediately, and the fund eventua
- Following the investment, what is the investor's ownership percentage in the company, assu
- What is the Interest Coverage Ratio?
- A private equity firm is calculating a 'Public Market Equiva… — If the KS-PME score is 1.1
- A sponsor provides an 'Equity Cure' to a portfolio company. What is the standard purpose o
- What is the new effective conversion price for the growth equity investor?
- Which company will report a higher 'Gross Margin' and a higher ending 'Inventory' value on
- In a European (whole-fund) waterfall, a fund has called $100… — How much 'carried interest