LBO & Paper LBO
How does debt paydown's contribution to returns change if the company is a high-cash-flow, low-growth business versus a high-growth, cash-burning one?
Model answer
High-cash-flow / low-growth (e.g., mature industrials, consumer staples): debt paydown is the dominant driver — abundant FCF rapidly delevers, transferring EV from lenders to equity, and these…
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