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What is the purpose of the minimum cash balance in an LBO model? A ) To maximize the amount of debt financing available by showing
What is the purpose of the minimum cash balance in an LBO model?
ATo maximize the amount of debt financing available by showing lenders a more aggressive investment strategy.
BTo ensure the company has sufficient liquidity to cover daily operations and meet its net working capital requirements.
CTo inflate the company's total assets on the balance sheet, thereby artificially enhancing the company's perceived market value.
DTo reduce the overall risk of the LBO by allocating a larger portion of the investment to lowrisk cash assets.
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