hard · Investment Banking
An LBO analysis shows an IRR of 18% for a 5-year hold. Which of the following would be the most effective lever to increase the IRR to the sponsor's 20% target?
- Reducing the amount of leverage used in the transaction.
- Increasing the capital expenditures to improve the asset base.
- Negotiating a lower entry multiple.
- Extending the holding period to 7 years.
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