In an acquisition, cost of capital is one of the most important assumptions that go into determining whether the deal is favorable or not.

Cost of cash is the cheapest, followed by cost of debt, and then cost of equity (most expensive).

But when it’s a private equity firm that’s the buyer in the deal, they actually prefer using debt over cash in all of their transactions. Why is that?

Hear me explain the difference between an M&A deal and a LBO deal when thinking about cost of capital.

Book a Virtual Coffee Chat with an Upperclassmen Who Secured an Offer: wallstmastermind.com/apply?utm_source=podcastep204

In an acquisition, cost of capital is one of the most important assumptions that go into determining whether the deal is favorable or not. Cost of cash is the cheapest, followed by cost of debt, and then cost of equity (most expensive). But when it’s a private equity firm that’s the buyer in the deal, they actually prefer using debt over cash in all of their transactions. Why is that? Hear me explain the difference between an M&A deal and a LBO deal when thinking about cost of capital. Book a Virtual Coffee Chat with an Upperclassmen Who Secured an Offer: wallstmastermind.com/apply?utm_source=podcastep204

In an acquisition, cost of capital is one of the most important assumptions that go into determining whether the deal is favorable or not.

Cost of cash is the cheapest, followed by cost of debt, and then cost of equity (most expensive).

But when it’s a private equity firm that’s the buyer in the deal, they actually prefer using debt over cash in all of their transactions. Why is that?

Hear me explain the difference between an M&amp;A deal and a LBO deal when thinking about cost of capital.

Book a Virtual Coffee Chat with an Upperclassmen Who Secured an Offer: wallstmastermind.com/apply?utm_source=podcastep204

Episode 204: Cost of Capital in M&A vs LBO

Wall Street Mastermind provides 1-on-1 coaching to students who are trying to break into investment banking, helping you land the top 1% jobs on Wall Street that pay six-figures straight out of school. It’s led by Sam Shiah, a former investment banker (Morgan Stanley Tech) and private equity investor (GI Partners).

Not only have we maintained a 90%+ success rate over the years, we even offer a money back guarantee - meaning if you work with us and don’t get at least one investment banking offer, we will refund your entire investment in our program. 
Interested in learning more? 

Book a virtual coffee chat with our team to see if you’re a good fit: www.wallstmastermind.com/apply?utm_source=podcast

Education

Wall Street Mastermind provides 1-on-1 coaching to students who are trying to break into investment banking, helping you land the top 1% jobs on Wall Street that pay six-figures straight out of school. It’s led by Sam Shiah, a former investment banker (Morgan Stanley Tech) and private equity investor (GI Partners). Not only have we maintained a 90%+ success rate over the years, we even offer a money back guarantee - meaning if you work with us and don’t get at least one investment banking offer, we will refund your entire investment in our program. Interested in learning more? Book a virtual coffee chat with our team to see if you’re a good fit: www.wallstmastermind.com/apply?utm_source=podcast

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Episode 204: Cost of Capital in M&A vs LBO

Episode 204: Cost of Capital in M&A vs LBO

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