Jan 05, 2023

Interesting Interview Question (Private Credit)

Hey all -

Came across a very interesting question in one of my interviews and thought I would share it as it was quite thought provoking. I will answer the question after enough people have had the opportunity to attempt... Good Luck!

You own a loan of 100 with a coupon of 10%. You then lever this loan and get an advance rate of 60% with interest of 6%. What is the Yield to Equity?

 

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