Which of the following forms of financing tends to be the least flexible?

Bank debt

Mezzanine debt

Equity contribution

High yield bonds

A target was purchased for $1,500.0m with an equity contribution of $500.0m, and by year 5 $500.0m of cash flow was used to repay debt. Assuming the sponsor sells the target for the enterprise value, what is the value of the sponsor's equity?

$1,500.0m

$1,000.0m

$500.0m

What is the classification of a covenant that limits the amount of debt the borrower can have outstanding?

Affirmative

Negative

Maintenance

Financial

What is a private equity firm considered in an LBO?

A financial sponsor

A strategic investor

A passive investor

A limited partner

All of the following are primary classifications of covenants EXCEPT:

		Affirmative
		Negative
		Maintenance
		Financial