medium · Investment Banking
A private equity firm is evaluating an LBO of a target with $200 million in LTM EBITDA. The firm uses 5.0x Debt/EBITDA in leverage and contributes $400 million in equity to complete the $1,400 million acquisition. After 5 years, the company is sold for an Enterprise Value of $1,800 million with $600 million in remaining debt.
What is the Multiple on Invested Capital (MOIC)?
- 4.5x
- 3.0x
- 1.5x
- 2.0x
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