Investment Banking World 244
Conduct leveraged buyout financial analysis for the private equity buyer of the EdTech target, confirming leverage capacity, assessing IRR returns, and modeling cost synergies and integration complexity.
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World Files
Tasks (9)
Using KSchool's DCF, update the 2026 revenue growth rate so that the 2024-2028 Revenue CAGR is equal to INST's 2019-2023 selling and marketing expense CAGR. Then make it a 6-year projection period and keep assumptions for the 6th year the same from 2028. Add 25bps to Terminal Growth Rate. Accounting for these changes, return the implied share price to me right in here. Round the numbers to two decimal places.
Use the LBO model with the following indicative debt package to calculate these values --> then, return them back to me here 1/ Equity contribution 2/ Central case IRR 3/ Central case MOIC 4/ Exit net debt 5/ Maximum amount of revolver drawn Term Loan A: Amount: $1.8bn Term: 7 years, straight line amortising Rate: 7-year US Treasury (market rate) + 225bps Arrangement Fee: 0.75% Term Loan B: Amount: $600m Term: 10 years, bullet repayment Rate: 10-year US Treasury (market rate) + 275bps Arrangement Fee: 0.75% Revolver: Amount: $600m Rate: 5.5% Round percentages and multiples to two decimal places, and dollar amounts in millions, rounded to the nearest whole number. Assume market rates from 28-Nov-2025 (U.S. Treasury Daily CMT).
Calculate the 2027P equity value implied by the LBO output. Replace the 2027P exit EBITDA multiple with the average calculated FY2023 EV/EBITDA multiple for CHGG and LOPE. Present the result to me here, rounded to the nearest $ million
Can you help me calculate a new implied share price, rounded to two decimal places? Return your answer to me here Update the DCF so that its 2024-2028 R&D CAGR is equal to PWSC's 2019-2023 R&D CAGR. Update revenue growth rate for 2027 to achieve this. Then adjust operating expenses (excluding R&D) in year 2028 so that its 2024-2028 CAGR is one half PWSC's 2019-2023 G&A CAGR. Lastly, update the DCF with the average 10-year treasury rate for 12/2/2025 - 12/19/2025.
Referencing the KSchool DCF, how much does the company need to increase or decrease 2023's earnings to have it's P/E ratio in 2023 equal to the sector average for communication services as of 1/1/2026. Assume P/E is calculated using its implied share price from the DCF model. Return a short reply with the dollar amount in millions, rounded to nearest integer.
Calculate the 2028P equity value implied by the LBO output, assuming an exit multiple of 32.0x. Present your result to me as a message in here, rounded to the nearest $ million. Use the following conditions: - Set maximum leverage on the Term Loan A, measured against 2023A EBITDA, at 10.0x, with any remaining funding requirement to be satisfied through an increased equity contribution. - For revenue growth, calculate the average 2024 year‑over‑year revenue growth rate of the following three companies—Duolingo, Inc. (NASDAQ: DUOL), Coursera, Inc. (NYSE: COUR), and Grand Canyon Education, Inc (NASDAQ: LOPE). Apply this single average 2024 growth rate to the company’s revenue in 2024, and assume this constant revenue growth rate from 2025P - 2028P. - All other assumptions remain unchanged.
Using the DCF model, update the equity risk premium to be the risk-free rate plus 150 basis points and the cost of debt to be the risk-free rate plus 300 basis points Output the following rounded to two decimal places: - Implied DCF share price with a terminal growth rate of 1.25% and 5-year risk free rate of 12/12/2025 - Implied DCF share price with a terminal growth rate of 1.25% and 7-year risk free rate of 12/12/2025 - Implied DCF share price with a terminal growth rate of 1.75% and 5-year risk free rate of 12/12/2025 - Implied DCF share price with a terminal growth rate of 1.75% and 7-year risk free rate of 12/12/2025
I want to know the implied DCF share price with a revised scenario, rounded to two decimal points. Do your calculate by updating the cost of debt in the DCF model to be the average between the 1 year and the 5 year treasury rates as of 12/22/2025 plus 100 basis points. Set revenue growth rate to 12% for the entirety of the projection period and update the equity beta to 1.3. Don't edit any files, just print your answer back here.
Calculate the updated PV of FCF. Output it here. Round it to the nearest whole number, with zero decimals. Print your answer as a reply back here. Account for: 1. Identify the competitor in the comparable analysis file with the lowest EV/Revenue multiple. 2. Replace KSchool's gross margin rate for the projection periods with the FY 2024 gross margin of the competitor identified above and add +10%. 3. Replace KSchool's Operating expenses rate for the projection periods as the average of SG&A expenses as a percentage of revenue of the competitor from FY 2021 to FY 2024. 4. Update the risk-free rate to be the 20 year treasury yield from Oct 20, 2025.