Series 79 practice questionmediumCapital Structure Analysis
A borrower has total debt of $340 million and LTM EBITDA of $45 million. What is total leverage?
- A0.1x
- B7.1x
- C6.2x
- D7.6x✓ Correct answer
Explanation
Why D — 7.6x
7.6x 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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