hard · Private Equity & LBOs
A sponsor acquires a business for $500 million. At exit 5 years later, the Enterprise Value is $900 million and the Net Debt has been reduced from $300 million to $150 million.
What percentage of the total equity value creation is attributable to 'Multiple Expansion' if the entry and exit multiples were both 10.0x?
- 0%
- 40%
- 50%
- 25%
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