hard · Private Equity & LBOs
A growth equity fund targets a 25% IRR over a 5-year hold for an 8 million investment. The target's EBITDA is expected to be10.1 million at exit with a 7.0× multiple and 3 million in exit net debt.
If the fund expects10% dilution from a future round, what ownership percentage must they acquire today?
- 25.0%
- 36.1%
- 40.2%
- 32.5%
Sign up free to see the explanation and track your rank →
More Private Equity & LBOs 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?