medium · Investment Banking ma-lbo
A financial sponsor acquires a target for $1,000 million using $600 million of debt and $400 million of equity. After 5 years, the Enterprise Value has grown to $1,400 million, and the debt balance has been reduced to $300 million.
What is the Internal Rate of Return (IRR) for the sponsor?
- 27.5%
- 16.4%
- 22.4%
- 35.0%
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