Series 79 practice questionhardCapital Structure Analysis
A borrower has total debt of $250 million and LTM EBITDA of $45 million. What is total leverage?
- A0.2x
- B5.1x
- C4.5x
- D5.6x✓ Correct answer
Explanation
Why D — 5.6x
5.6x Total leverage is calculated as total debt divided by EBITDA. Leveraged finance teams use this ratio to assess debt capacity, covenant compliance, and relative risk.
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