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Finance and Financial Management

Finance Faculty Publications

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2012

Slack term

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Extending The Arnold-Eisemann Algorithm For Pro Forma Circularity With A Specific Mix Of New Debt And New Equity, Tom Arnold Jan 2012

Extending The Arnold-Eisemann Algorithm For Pro Forma Circularity With A Specific Mix Of New Debt And New Equity, Tom Arnold

Finance Faculty Publications

Arnold and Eisemann (2008) developed an algorithm that calculates the value of long-term debt when long-term debt is considered the "plug" or "slack" term within a pro forma analysis. In this paper, the algorithm is presented in a slightly different form and adjusted for the use of a target mix of new debt and new stock.

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