Guided Walkthroughs
Paper LBO — Step 5 of 10: Build Year 1 free cash flow available for debt paydown.
Model answer
Year 1: EBITDA 110 − D&A 20 = EBIT 90. Interest = 10% × $600M opening debt = $60M (we hold interest flat on the initial balance for simplicity — slightly conservative, since paydown would actually…
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More from Guided Walkthroughs
- Full DCF — Step 1 of 12: Set up the model. SteadyCo has $100M of revenue in Year 0. What operating assumptions do you need before you can project unlevered free cash flow, and what are ours?
- Full DCF — Step 2 of 12: Project SteadyCo's revenue and EBITDA for Years 1–5.
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- Full DCF — Step 4 of 12: State the unlevered FCF formula and compute Year 1 unlevered FCF for SteadyCo.
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