- CFA Exams
- CFA Level I Exam
- Study Session 15. Alternative Investments
- Reading 41. Private Equity Valuation
- Subject 2. Valuation characteristics and issues in venture capital vs. buyout
CFA Practice Question
Which statement(s) is (are) true for a LBO firm? Buyout investments usually have:
II. Established products.
III. High working capital requirement.
IV. Significant asset base.
I. Measurable risks.
II. Established products.
III. High working capital requirement.
IV. Significant asset base.
Correct Answer: I, II and IV
They usually have low working capital requirement.
User Contributed Comments 1
| User | Comment |
|---|---|
| davidt87 | III would be a disincentive to taking on a lot of debt |