easy · Investment Banking ma-lbo

An LBO acquires a business for 500 million of enterprise value using 300 million of debt and 200 million of sponsor equity. At exit, enterprise value is 600 million and remaining debt is $200 million. Ignore fees, cash, and interim distributions.

What is the sponsor’s gross multiple of invested capital (MOIC)?

  1. 1.5×
  2. 2.0×
  3. 2.5×
  4. 3.0×

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