NO.PZ2018111302000070
问题如下:
An investor asks the analyst to explain how a buyout fund can create value. The analyst responds:
“Private equity funds primarily finance their acquisition of portfolio companies with equity. When they do access credit markets, they do so on less favorable terms than comparable public companies, but they can usually offset their relatively higher borrowing costs by re-engineering the underlying portfolio companies to improve their overall profitability.”
Which of the analyst’s statements regarding value creation by private equity funds is most accurate?
选项:
A.
The statement regarding corporate re-engineering
B.
The statement regarding credit market terms
C.
The statement regarding method of financing
解释:
A is correct. Private equity funds increase value by taking on high levels of debt on favorable terms. They are able to offset their borrowing costs by superior reorganization and re-engineering capabilities.
B is incorrect. Private equity funds obtain favorable terms from credit markets based on their reorganization skills which lead to value enhancement.
C is incorrect. Private equity funds increase value by taking on high levels of debt on favorable terms, rather than equity.
Re engineer没问题,a better alignment 也没问题
2 the ability to access credit markets on favorable terms 这里指的是PE可以比他投资的公司拿到更优惠的贷款的意思是么?题目讲的是PE比public company融资成本高,风马牛不相及,所以B不对?