LBO MODELING EXAM QUESTIONS AND ANSWERS WITH
COMPLETE SOLUTIONS VERIFIED GRADED A++
Sources for LBO (Total of 5, Answer up to 3)
1.) Cash (or potentially excludes minimum cash)
2.) Proceeds from option exercised
3.) Tranches of capital structure (secured, unsecured, convertible preferred, hybrid)
4.) Sponsor Equity
5.) Revolver, but is normally not part of sources. It typically provides liquidity if there are
working capital needs or needs for cash (read the language carefully to see if the
revolver is already drawn, by giving you the commitment fee and then the starting
multiple)
Uses (Total of 8, Answer up to 6)
1.) Purchase of company (assets or shares)
2.) Refinancing Debt
3.) Purchase of options
4.) Transaction costs
5.) Financing fees
6.) Keeping minimum cash (potentially)
7.) OID fees (potentially)
8.) Recapitalization
Refinancing Debt
COMPLETE SOLUTIONS VERIFIED GRADED A++
Sources for LBO (Total of 5, Answer up to 3)
1.) Cash (or potentially excludes minimum cash)
2.) Proceeds from option exercised
3.) Tranches of capital structure (secured, unsecured, convertible preferred, hybrid)
4.) Sponsor Equity
5.) Revolver, but is normally not part of sources. It typically provides liquidity if there are
working capital needs or needs for cash (read the language carefully to see if the
revolver is already drawn, by giving you the commitment fee and then the starting
multiple)
Uses (Total of 8, Answer up to 6)
1.) Purchase of company (assets or shares)
2.) Refinancing Debt
3.) Purchase of options
4.) Transaction costs
5.) Financing fees
6.) Keeping minimum cash (potentially)
7.) OID fees (potentially)
8.) Recapitalization
Refinancing Debt
