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You are a large private equity investor who is considering a LBO of BigCat Co.. You feel you need to pay a 25% control premium

You are a large private equity investor who is considering a LBO of BigCat Co.. You feel you need to pay a 25% control premium to buy BigCat Co. and the debt market will provide you with 6.0x leverage (i.e. Debt/EBITDA). BigCat Co. currently (i.e. pre-deal) has $8bn in debt, $25bn in equity and $4bn in EBITDA. How much equity from your LBO fund do you need to invest to buy BigCat Co.?: A) $15.25bn. B) $31.25bn. C) $39.25bn. D) $41.35bn

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