41. Which of the following choices properly ranks in ASCENDING order (from short

Question

41. Which of the following choices properly ranks in ASCENDING order (from shortest maturity to longest maturity) the debt instruments in the capital structure of a Leverage (2 points) Buyout Transaction? a. Revolver Senior Sub Notes Senior Notes b. Senior Notes Revolver c. Revolver Term Loan B d. Term Loan B Revolver Senior Sub Notes Senior Notes Senior Sub Notes Term Loan B Term Loan B Senior Sub Notes Senior Notes 42. The tenor (ie, length of time to maturity) of a bridge loan is typically: (2 points) a. 1 year b. 3 years c. 5 years d. 10 years 43. Which of the following are typical uses of a Revolving Credit Facility? CIRCLE ALL THAT APPLY (2 points) a. Maintenance capital expenditures b. Funding a portion of the LBO Purchase Price c. Working capital d. Long-term capital investment in Property, Plant & Equipment 44. Which of the following is a WEAKNESS of a dividend recapitalization? (2 points) a. b. c. d. Less sponsor equity post-transaction Transaction adds leverage to the capital structure Transaction provides a cash return to the sponsor Sponsor retains existing equity ownership 45. The projection period of an LBO model for a potential debt provider is typically how mamy years? (2 points) a. 1-2 years b. 3-4 years c. 7-10 years d. 12-15 years BFIN 7225 - Final Exam - Fall 2017 20171030.docx Page 9 of 10

Explanation / Answer

41.

Revolver is very short-term financing tool. Senior sub notes have maturity more than revolver but less than senior note and term loan B.

So, option (A) is correct answer.

42.

Bridge loan a tool of short term financing uses the bridge the Gap between long term loan payment and availability of fund with company. The tenure of bridge loan is 2 weeks to 3 year.

Option (B) is correct answer.

43.

Typical uses of a revolving credit facility are Maintenance of capital expenditure and working capital management.

Option (A) and (C) is correct answer.

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