The RRK buyout fund is considering an investment in a fertilizer distribution center. The stock currently trades
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The RRK buyout fund is considering an investment in a fertilizer distribution center. The stock currently trades at $20 per share with 150,000,000 shares outstanding. RRK offers $25 per share, 80% of which is funded by high-yield debt securities. The fund believes it can work with management to grow the firm at a rate of about 4% while also retiring half of the high-yield debt by an expected exit in year 6, reinvesting any profit in growth and debt reduction. What is the expected IRR of this investment?
P-68
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Related Book For
ISE Investments
ISBN: 9781266085963
13th International Edition
Authors: Zvi Bodie, Alex Kane, Alan Marcus
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