Leveraged finance is used to increase an investment's potential returns by purchasing assets with more debt than equity or cash. This is a common practice by private equity firms and leveraged buyout (LBO) firms to increase their investment's IRR.

While having high leverage increases return due to the lower cost compared to equity, it also increases the volatility of a company's earnings and cash flow. The company is also prone to risks such as liquidity of the company, stability of the market, and economic factors such as changes in interest rates.

Use this leveraged finance template to evaluate how leverage finance impacts the IRR to equity investors.

Reviews Add a review
No reviews yet

More From Corporate Finance Institute®

Browse our top rated business templates. See All
REIT Financial Model Template
This REIT financial model template acts as a guideline for modeling a real estate investment trust (REIT). This model will…
Energy Industry Comps Template Energy Industry Comps Template
This energy industry comps template provides a guideline and example of what a comparables universe would look like for a…
Financial Institution Dividend Discount Model
The financial institution dividend discount model uses future dividends to find the implied share price. This model is based on…
Loan Payment Calculator
The loan payment calculator allows users to determine the principal and interest payment each month until the full balance of…
DDM - Excel Dividend Discount Model Template
The dividend discount model template allows investors to value a company base on future dividend payments. This is based on…
Non-directional trading strategy template Non-directional Trading Strategies Template
The non-directional trading strategies template allow users to determine the profit when buying options. This template focuses on non-directional strategies…
See All