subordinated debt pricing model
I am going through an interview process with a subodinate debt/mezzanine fund that finances small/medium sized businesses. One question I have been asked, is how I would determiane the pricing of a loan? I know I could use a build up model where I start with a prime rate or senior debt yield and then add on other risk premiums, but is there anything else that is more concrete? Suggested readings?
Appreciate the input.
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