Debt Capacity for Acquisition Financing Arzac, Chapter 7.

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Presentation transcript:

Debt Capacity for Acquisition Financing Arzac, Chapter 7

Financing Growth cash flows are key internal financing use of debt dividend policy optimal mix for firm debt equity new equity dividend payout

Debt Capacity Calculator calculator is an Excel file on disk included with textbook for certain set of parameters that are typically viewed when considering the debt capacity for a firm considering an LBO or recapitalization not as straightforward as suggested by calculator though – need to be conservative in determining inputs and also need to test output of model for robustness (situations that might adversely affect the firm and its sales and CFs)