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QUESTION
How do I develop a model to adjust these following drivers:
How do I develop a model to adjust these following drivers:
(1) size of transaction
(2) capital structure composition (use senior debt, subordinated debt, and equity)
(3) assume senior debt is floating rate and referenced to LIBOR; subordinated debt is fixed rate
(4) make an assumption for yields on each capital structure component
How do I use quarters as time periods to calculate the IRR on each capital structure component and a total blended IRR. And calculate total Enterprise Value at the time of sale to reach a 20% IRR on Equity?
