The Value of a Corporation in a Levered Buyout Is

question 54

Multiple Choice

The value of a corporation in a levered buyout is composed of which following four parts:

• A) unlevered cash flows and interest tax shields during the debt paydown period, unlevered terminal value, and asset sales.
• B) unlevered cash flows and interest tax shields during the debt paydown period, unlevered terminal value and interest tax shields after the paydown period.
• C) levered cashflows and interest tax shields during the debt paydown period, levered terminal value and interest tax shields after the paydown period.
• D) levered cashflows and interest tax shields during the debt paydown period, unlevered terminal value and interest tax shields after the paydown period.

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Definitions:

Preparedness

The species-specific biological predisposition to learn in certain ways but not others.

Instinctive Drift

The tendency of an animal to revert to instinctive behaviors that interfere with the conditioned response being taught.

Instinctive Learning

The innate ability of an organism to perform a certain behavior the first time it is exposed to the appropriate stimulus.

Preparedness

The evolutionary predisposition to learn certain types of behaviors or concepts more easily than others.