Anatomy of a Leveraged Buyout - NYU Stern School of Business
Anatomy of a Leveraged Buyout - NYU Stern School of Business
Anatomy of a Leveraged Buyout - NYU Stern School of Business
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
Tools for assessing the effects <strong>of</strong> debt<br />
The Cost <strong>of</strong> Capital Approach: The optimal debt ratio is the one that<br />
minimizes the cost <strong>of</strong> capital for a firm.<br />
The Enhanced Cost <strong>of</strong> Capital Approach: The optimal debt ratio is the one that<br />
creates a combination <strong>of</strong> cash flows and cost <strong>of</strong> capital that maximizes firm<br />
value.<br />
The Adjusted Present Value Approach: The optimal debt ratio is the one that<br />
maximizes the overall value <strong>of</strong> the firm.<br />
Aswath Damodaran 13