1. In the text,we use spreadsheets to convey how an LBO is set up and how cash flows can be used to pay down debt in a successful LBO. A firm with the characteristics of the usual LBO candidate in the...

1. In the text,we use spreadsheets to convey how an LBO is set up and how cash flows can be used to pay down debt in a successful LBO. A firm with the characteristics of the usual LBO candidate in the early 1980s would have value drivers that could be improved by a turnaround. In Table P1.1,we present the relevant operating relationships and financial information for Coleman Textiles, which has not been managed well. New England Partners, an investment group, made a leveraged buyout of Coleman Textiles.They replaced management with a new team with a track record of high-quality performance in the textile business. After a turnaround was accomplished by the new management group, the operating relationships and financial information were changed to the patterns shown in Table P1.2.¦ 1.1 Based on the patterns in Table P1.1, what is the indicated share price of Coleman Textiles?