The initial investment to fund an acquisition

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Reference no: EM132019206

1. An additional equity investment by the sponsor that is planned to be made after the initial investment to fund an acquisition by the LBO target company would be presented on the Investment Timeline as:

a. A positive number equal to the additional equity investment b. A positive number equal to the dividend received c. A negative number equal to the additional equity investment d. A negative number equal to the dividend received

2. Which of the following is a reasonable total leverage ratio for an LBO under normal market conditions?

a. 5.0x net income b. 3.0x EBITDA c. 1.0x sales d. 5.0x EBITDA

Please answer both

Reference no: EM132019206

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