Cash Dividend Scenario--PE

Not all cash is used to repay debt. Most debt contracts actually won't allow you to amortize the full balance early because this impairs the lender's return via a reduction of total interest collected (more on this in our private credit models).

In this scenario, excess cash is paid as a dividend to equityholders. Be sure to consider all cash effects received by equityholders over each period.

Goal: complete the template in under 45 minutes, model from a blank sheet in under 1 hour. Try to summarize in 3 sentences or less why this would or would not be a good investment purely based on the output of the model. 

Steps:

1. Download the prompt and use the attached template to assist your modeling 
2. Take a minute to look through the different sections of the model to understand where inputs may be flowing and where outputs are coming from
3. Work the model top-down filling in the assumptions section, then the sources & uses, etc. You should only have to fill out the cells colored light gray 
4. After a first try, open up the answer file and really study the underlying formulas and the levers to impact returns 
5. Attempt the template again. After completing the template with no assistance from the answer file, open up a blank excel and try to build a model from scratch to answer the prompt

The_Pulse_LBO_Model_Excess_Cash_Flow_Prompt.docx

The_Pulse_LBO_Model_Excess_Cash_Flow.xlsx

The_Pulse_LBO_Model_Excess_Cash_Flow_Answer.xlsx

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