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
The statement regarding credit market terms
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.
请问“ 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.”这句话应该怎样理解?PE基金通过承担债务来增加价值吗?然后通过对所投资公司的业务重组来抵消借款成本?是这样吗?