Impact of Debt Interest Rates in LBO Valuation

In a Leveraged Buyout (LBO), an investment firm seeks to acquire a company primarily using borrowed funds. The firm plans to generate returns on its investment through the eventual sale or public offering of the acquired company. LBOs are characterized by significant debt financing, which may influence the valuation of the target company.

Which of the following factors is most likely to influence the valuation of a target company during an LBO?