Series 79 practice questioneasyCapital Structure Analysis
A borrower has total debt of $310 million and LTM EBITDA of $45 million. What is total leverage?
- A0.1x
- B6.4x
- C5.6x
- D6.9x✓ Correct answer
Explanation
Why D — 6.9x
6.9x 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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