XYZ Private Equity Partners purchases ABC Target Company for 5.0x EBITDA in year 1. The...
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XYZ Private Equity Partners purchases ABC Target Company for 5.0x EBITDA in year 1. The debt-to-equity ratio for the LBO acquisition will be 60:40. Assume the weighted average interest rate on debt to be 10%. ABC expects to reach $100 million in sales revenue with an EBH5A of 40% of that in Year 1. What is the Purchase price of ABC for XYZ? What is the debt funding amount
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