Same setup as the 2nd lien question ($100 EBITDA at 10x = $1,000 EV, with a $400 1st lien and $200 2nd lien), but now the Enterprise Value falls to $500. How much are the 1st lien, 2nd lien, and equity values trading at?

Question

IBPrep · Accepted Answer

50 on the dollar [$100 - $200 = -$100, 100/200 = 50%].

Equity is wiped out, trading at 0 (zero cents on the dollar).

Same setup as the 2nd lien question ($100 EBITDA at 10x = $1,000 EV, with a $400 1st lien and $200 2nd lien), but now the Enterprise Value falls to $500. How much are the 1st lien, 2nd lien, and equity values trading at?

Answer

More LBO interview questions

Same setup as the 2nd