hard · Private Equity & LBOs
A sponsor decomposes the returns of a 5-year LBO. Entry EV was $640M (8.0x EBITDA of $80M) with $320M debt. Exit EV is $1,125M (9.0x EBITDA of $125M) with $200M debt.
What is the approximate percentage of total equity value creation driven by multiple expansion?
- 50.0%
- 11.7%
- 20.7%
- 25.0%
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