In this workout, a private equity firm has acquired the equity of Pumpkin company for 10,000 It's last 12 months EBITDA is 1,200 And the total amount of net debt to be refinanced as a result of the acquisition is 3,560 The banks have agreed to provide 4.5 times EBITDA of senior debt and one times of mezzanine financing We are asked to calculate the required equity financing to complete the transaction So lots of those numbers have been provided to us in the question, so we now need to workout a sources and uses of funds We've done all of that, the equity financing part will be our answer So we start with the uses of funds, my equity purchase price is the 10,000 and the refinance of net debt is 3,560 That means the total uses is 13,560 And that's what the company now needs to source, part of which will now come from equity So now let's go onto the sources then, so my senior debt financing, we know that's going to be 4.5 times by EBITDA And the EBITDA is 1,200 The mezzanine loan is one times by the EBITDA And my equity financing must now be the plug I've got about 6,500 of financing so far, I need 13,560 in total So take my total uses of funds, subtract what I've already managed to source And my equity financing is 6,960 Let's just double check that the total uses equals the total sources, and it does!