All assignments should be written in your own words and provide examples

All assignments should be written in your own words and provide examples and opinions beyond the textbook or any other source you get them from as listed in the online assignment guidelines. This is an individual assignment. For calculations show ALL your steps including calculator/Excel keystrokes and/or formulas. It is important for full credit to explain and briefly discuss your final answers and NOT just provide a number answer only or textbook definitions or any other supplements. USE YOUR OWN WORDS. Plagiarism software will be used to compare to those and to each other. Please label your uploaded assignment file with the course and your name on the file to the online assignment link. It is important to show you work for partial credit. Remember to show all work including calculator keystrokes if using excel submit the original excel file. Also, include a brief discussion of your results using your OWN examples and opinions where applicable.

NAME: ___________________________________________________

Complete Questions Questions 1 and 2 These are the only Choices.

—————————————————————————————————————

(30% REQUIRED)

Two friends Harley and Davidson agree on a company deal with an implied enterprise value of $5M. Harley invests $3M. The deal is structured as all-common, and American Private Equity comes in and offers $8.5M million for the company. Harley owns 60% and Davidson owns 40%.

Set up the All-Common structure for the two partners. Calculate the payout table and discuss

If the deal is structured as redeemable preferred with $1,000 cheap common for the two partners, calculate the payout table and discuss

The deal is Convertible Preferred for the two partners. Calculate the payout table and discuss

What is the importance of capital structure ownership in private equity.

(70%) VALUATION: Perform an LBO analysis of small cap company using different types of debt to value a purchase of another company. It is important to discuss the details of what you are doing and your conclusion. If there is no debt, propose hypothetical debt that you would need to purchase the company outright. You can follow and use the Excel Spreadsheet provided on Blackboard Chapter 5 Rosenbaum Excel. Make sure this is detailed and discuss your reasoning and results.

=========================================================