1.

Give An Example Of A "real-life" Lbo.

Answer»

The most COMMON EXAMPLE is taking out a mortgage when you buy a house. Here's how the analogy works:

  • Down PAYMENT: Investor Equity in an LBO
  • Mortgage: DEBT in an LBO
  • Mortgage Interest PAYMENTS: Debt Interest in an LBO
  • Mortgage Repayments: Debt Principal Repayments in an LBO
  • Selling the House: Selling the Company / Taking It Public in an LBO

The most common example is taking out a mortgage when you buy a house. Here's how the analogy works:



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