medium · Principles of Finance time-value-of-money
A private equity firm buys a company for $1.0B using $300M of equity and $700M of debt. Five years later, the firm is sold for $1.5B. At the time of sale, the debt has been paid down to $400M.
What is the Multiple of Invested Capital (MOIC) for the equity investors?
- 5.00x
- 2.25x
- 3.67x
- 1.50x
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