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Leveraged Buyouts: A Practical Introductory Guide to LBOs by David Pilger

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Chapter 12: Outstanding Debt Balance

Thus far we have covered the pro forma profitability (before net interest consideration) of the target company in our contemplated leveraged buyout analysis, as well as the projected cash flow available for debt repayment generated by the business in Year 1 of the explicit forecast range. As we did in our income statement, we will leave remaining years of the pro forma forecast range until the end, once we finish Year 1 and ensure that our formulas are correct and ready to be expanded to the following years. We are on our way to determining what the cost of financing the leveraged buyout will be in the form of net interest expense. The next step in the process of making that determination is projecting the ...

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