University of Twente Student Theses
Private equity investment simulation : analysing the optimal multiple and leverage ratio using an LBO simulation
Meer, T.Q.B. van der (2021) Private equity investment simulation : analysing the optimal multiple and leverage ratio using an LBO simulation.
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| Abstract: | This research uses a Leveraged Buyout simulation model to determine the optimal financial structure in a Private Equity deal for multiple different sectors. We assess the impact of the leverage ratio and valuation multiple and find that risks taken in one parameter should be offset by the other. A 1% increase in leverage ratio should optimally be accompanied by a decrease of 0.66% to 0.96 % in the multiple, depending on the sector. Conservative financial deal structures, leading to slightly lower returns, reduce the risks involved in the transaction significantly. |
| Item Type: | Essay (Master) |
| Faculty: | BMS: Behavioural, Management and Social Sciences |
| Subject: | 83 economics |
| Programme: | Industrial Engineering and Management MSc (60029) |
| Link to this item: | https://purl.utwente.nl/essays/87817 |
| Export this item as: | BibTeX EndNote HTML Citation Reference Manager |
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