hard · Private Equity
In a Management Incentive Program (MIP), a PE sponsor invests $180M for 90% of the equity, while management invests $20M for 10%. At exit, the equity is worth $600M.
If a ratchet triggers giving management a total of 15% of exit proceeds, what is the 'Envy Ratio'?
- 0.6x
- 1.5x
- 3.0x
- 1.0x
Sign up free to see the explanation and track your rank →
More Private Equity practice
- If the GP receives a 20% carry on the profit from Deal A immediately, and the fund eventua
- Following the investment, what is the investor's ownership percentage in the company, assu
- What is the Interest Coverage Ratio?
- A private equity firm is calculating a 'Public Market Equiva… — If the KS-PME score is 1.1
- A sponsor provides an 'Equity Cure' to a portfolio company. What is the standard purpose o
- What is the new effective conversion price for the growth equity investor?
- Which company will report a higher 'Gross Margin' and a higher ending 'Inventory' value on
- What is the company's Interest Coverage Ratio?