Courses / Leveraged Buyouts (Standard) / Cost of Capital in LBO

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Cost of Capital in LBO

Because LBO is incrementally riskier than buying a few shares on the stock market, private equity investors require a much higher return through LBO.

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Leveraged Buyouts (Standard)

1. What is a Leveraged Buyout (LBO)?
(3:51)
2. Why Private Equity Firms Use Leverage
(4:25)
3. Why the Use of Leverage Boosts Equity Returns
(8:17)
4. How Equity Investors Make Money from LBO
(2:58)
5. How a LBO Model Works
(2:25)
6. Modeling the Entry Valuation
(8:40)
7. Financing Fees
(2:05)
8. Amortization of Financing Fees
(3:29)
9. Modeling the Capital Structure Table
(12:29)
10. Modeling LBO Sources & Uses
(6:43)
11. Modeling LFCF Projections
(7:56)
12. Introduction to Debt Schedule
(3:50)
13. Cash Available to Optionally Repay Debt
(3:56)
14. Modeling Cash Available to Optionally Repay Debt
(4:55)
15. Modeling the Benchmark Rate
(2:24)
16. Order Matters in Debt Schedule
(1:17)
17. Modeling Revolver in Debt Schedule
(10:42)
18. Modeling Term Loan in Debt Schedule
(10:34)
19. Modeling Bond in Debt Schedule
(2:16)
20. Significance of Positive vs. Negative LFCF
(3:06)
21. Net Debt
(1:05)
22. Modeling the Capital Structure
(5:49)
23. Modeling the Integration of Financials
(3:42)
24. Circularity in the Debt Schedule
(2:15)
25. Circular Reference Error
(5:30)
26. Modeling the Circularity Protection
(2:30)
27. Modeling the Returns Profile
(3:54)
28. Cost of Capital in LBO
(2:21)
29. Drivers of IRR in LBO
(4:15)
30. Connecting Dots
(2:16)

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