A leveraged IRR is a mathematical formula used to determine the
rate of your return that you are currently getting from an
investment. This formula is a very complicated procedure.
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Since derivatives are typically highly leveraged, they are
almost always riskier that the underlying asset. That is, a small
change in asset value will typically produce a much larger % change
in the value of the derivative.
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Free cash flow or FCF is important to leveraged buyouts because
it helps an analyst or banker determine whether there are sufficent
excess funds to pay back the loan associated with the leveraged
buyout. Free cash flow is a measure of financial performance
calculated as operating cash flow minus capital expenditures. FCF
is important to leveraged buyouts because it helps an analyst or
banker determine whether there are sufficient excess funds to pay
back the loan associated with the leveraged buyout.