Private Equity

Question 1

Dry powder

Answer 1

marketable securities that are highly-liquid and cash-like;lquid cash assets/reserves

Question 2

Reverse termination Fee

Answer 2

(seller pays buyer when deal not consumated) A fee paid by the buyer if it breaches the acquisition agreement or is unable to consummate the transaction due to lack of financing and the seller terminates the agreement in accordance with its terms.

Question 3

Full equity backstop

Answer 3

the sponsor commits to funding the whole purchase price

Question 4

Bridge financing

Answer 4

is an interim financing option used by companies and other entities to solidify their short-term position until a long-term financing option can be arranged.

Question 5

market capitalization

Answer 5

refers to the total dollar market value of a company’s outstanding shares=company shares multipled by current market price of one share.