General — Private Equity Practice Questions

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1. If the actual SOFR rate drops to 0.50%, what is the total interest rate paid by the borrower?
2. In a European (whole-fund) waterfall, a fund has called $100… — How much 'carried interest' does the GP receiv
3. What is the fund's Total Value to Paid-In (TVPI) multiple?
4. What is the new effective conversion price for the growth equity investor?
5. What is the maximum debt allowed if the leverage covenant is set at 5.0x Covenant EBITDA?
6. If EBITDA remains exactly the same and no debt is paid down, which lever is the sole source of the equity retu
7. If net debt remained constant at $200M throughout the hold, what was the primary source of the equity value in
8. Which company will report a higher 'Gross Margin' and a higher ending 'Inventory' value on the balance sheet?
9. A practitioner is calculating the 'Envy Ratio' in an LBO. If the management team's MoIC is 6.0× and the PE spo
10. What is the sponsor's required equity contribution?
11. Following the investment, what is the investor's ownership percentage in the company, assuming no option pool
12. What is the Interest Coverage Ratio?
13. What is the approximate internal rate of return (IRR)?
14. A private equity firm is calculating a 'Public Market Equiva… — If the KS-PME score is 1.15, what does this ge
15. If Year 1 Excess Cash Flow is $40M, how much is used to pay down the debt?
16. If no principal is repaid, what is the outstanding principal balance at the end of the first year?
17. What is the company's Interest Coverage Ratio?
18. If the company exits with an equity value of $600M, what is the net payout to the management pool?
19. What is the sponsor's ownership percentage of the new company's equity?
20. A $500M fund uses a 'Subscription Credit Line' to bridge its… — What is the most likely impact of this maneuve
21. According to the provided VC benchmarks (Median 1.3–1.8×, Top-quartile 3.0–5.0×), how is this fund performing?
22. If the GP receives a 20% carry on the profit from Deal A immediately, and the fund eventually liquidates with
23. Which option has the lower weighted average cost of debt?
24. A sponsor provides an 'Equity Cure' to a portfolio company. What is the standard purpose of this action in a l
25. Which is a better LBO candidate, all else being equal?
26. If the cost of borrowing at the fund level is 4%, what is the net yield to the LPs (ignoring fees)?
27. A fund's Limited Partnership Agreement (LPA) contains a 'GP… — If this $10M completed the catch-up, what was t
28. What is the Equity Value of the company?
29. If the total paid-in capital is $180M, what is the DPI (Distributed to Paid-In) multiple?
30. If the sponsor achieved a 2.18× MoIC, what is the approximate IRR?