Hello. I need some help with two interview questions I have.
Hi,
I’m doing some interview prep for IB and I am looking for some answers for some of the questions I have.
Q1# From an IRR perspective, is it better to pay off debt or pay shareholders with dividends?
Q2# In an LBO how do you increase IRR? My answer was that you would simply increase the leverage greater than the amount of equity used as increasing leverage increases IRR. Is that correct?
With these questions could you please explain the ‘why’ as I’m learning to understand the theory behind it.
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