easy · Investment Banking valuation-core
In an LBO, if the entry multiple is 8.0x EBITDA and the exit multiple after 5 years is also 8.0x EBITDA, how can the sponsor still generate a positive return?
- Only through a dividend recapitalization
- Only if they increase the exit multiple to 10.0x
- Through debt paydown and EBITDA growth
- By increasing the amount of cash held on the balance sheet
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