Question:

Why do private equity firms use leverage when buying a company?

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Answer:

By using significant amounts of leverage (debt) to help finance the purchase price, the private equity firm reduces the amount of money (equity) that it must contribute to the deal. Reducing the amount of equity contributed will result in a substantial increase to the private equity firm's rate of return upon exiting the investment.

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Question:

Why do private equity firms use leverage when buying a company?

Answer:

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Question:

Why do private equity firms use leverage when buying a company?

Answer:

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With an EBITDOG membership, you’ll get answers to hundreds of interview questions sourced from the top investment banks across Wall Street.

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With an EBITDOG membership, you’ll get answers to hundreds of interview questions sourced from the top investment banks across Wall Street.

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