a. What equity participation (percent ownership) would you demand if you require 17% expected return from the

Question:

a. What equity participation (percent ownership) would you demand if you require 17%

expected return from the joint proceeds of the subordinated note and the equity and you assume exit in year 5 at an EBITDA multiple equal to 6×? HTF is not expected to make cash distributions during this period. Under what conditions would your return be more (less) than 17%?

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