Lecture7 - when to use APV

Pjisanontradedcompanythatoperatesinthefast

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Unformatted text preview: r amounts of debt and interest at each point in time, then the APV method is easier to use. 4 APV vs. WACC in an Example Kohlberg, Kravis & Roberts (KKR), a well­known leveraged­buyout (LBO) spet, is considering the acquisition of Papa Jones (PJ). PJ is a non­traded company that operates in the fast­ food industry. PJ has under­performed its industry peers during the last 5 years and is up for sale at $80. KKR’s plan is to purchase the company in an LBO transaction that would allow KKR’s spets to restructure its operations. We want to know the NPV of the a...
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This document was uploaded on 03/09/2014 for the course COMM 371 at UBC.

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