medium · Investment Banking ma-lbo
In a paper LBO scenario, a sponsor acquires a business for 10.0x LTM EBITDA of $100M. The deal is funded with 60% debt. After 5 years, the EBITDA has grown to $150M, and $200M of debt has been paid down.
If the sponsor exits at the same 10.0x multiple, what is the Multiple of Invested Capital (MOIC)?
- 1.50x
- 2.75x
- 3.75x
- 2.25x
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