hard · Private Equity advanced-lbo
A private equity firm invests $200M for a 100% stake in a company. The deal includes a Management Incentive Plan (MIP) consisting of 'sweet equity' where the management team receives 10% of the common equity at exit after a 1.0x cost strike.
If the company is sold in Year 5 for an Enterprise Value of $800M and has $300M in remaining net debt, what is the sponsor's MOIC?
- 2.25x
- 2.10x
- 2.50x
- 2.35x
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