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Target Inc. has a $100 million debt and $500 million equity and is being bought out by a private equity fund in an LBO transaction.
Target Inc. has a $100 million debt and $500 million equity and is being bought out by a private equity fund in an LBO transaction. The PE fund will pay $700 million to buy out the target firm's existing equity, funded by 550 million of new debt and 150 million of equity investment. As a bondholder of Target Inc., which of the following is most likely to happen to the value of your bond? Increase Decrease Unchanged. Cannot be determined
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