03. Unlevered Return and the Leverage Effect

The right way to quantify how debt and growth capital influence private equity returns.

 

Module Category:

 

Key Concept: Total shareholder equity value (TEqV) for a company can be expressed as the product of its total enterprise valuation (TEV) and its equity ratio (ER). This allows analysts to break the Isomeric Return (see Module 02) into an Unlevered Return and the Leverage Effect.

 


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