In a traditional LBO analysis, it is common practice to assume: a. An exit multiple greater than the entry multiple b. A dividend recapitalization strategy in year 5 c. An exit multiple equal to or below the entry multple d. Paying off all of the debt prior to the exit 11) Under what circumstances might a strategic buyer use LBO analysis? a. To determine the debt capacity of their company. b. Strategic buyers would not use LBO analysis c. To determine the price a financial sponsor bidder can afford to pay when competing for an asset in an auction process d. To help spread comparable companies a 12) What are the key variables for sensitivity analysis performed in LBO analysis? I. Purchase Price II. Financing structure III. Entry multiple IV. Exit multiple a. I and II b. II and III c. I, II and IV d. I, II, III and IV

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