medium · Private Equity paper-lbo
A portfolio company with 60m of EBITDA and 120m of net debt undergoes a dividend recapitalization. It raises 90m of new debt, increasing its total leverage to 3.5×.
If the sponsor's original equity investment was 150m, what percentage of their initial capital is returned via this recapitalization dividend?
- 40%
- 75%
- 100%
- 60%
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