medium · Private Equity pe-core
A portfolio company is undergoing a dividend recapitalization. Current EBITDA is $120M, and existing debt is $400M. The sponsor issues $720M of new debt (6.0x leverage) to refinance the old debt and pay a dividend.
If transaction fees are $10M, what is the gross dividend paid to the sponsor (assuming 100% ownership for simplicity)?
- $320M
- $310M
- $720M
- $20M
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