hard · Private Equity paper-lbo
Consider a 'Paper LBO' scenario: Entry EBITDA is $100M, entry multiple is 8.0x, and leverage is 5.0x. EBITDA grows at 10% annually over a 5-year hold. If the exit multiple remains 8.0x and the company pays down $150M of debt while maintaining the same cash balance, what is the approximate IRR? Use 1.10⁵ = 1.61.
- 32.1%
- 15.0%
- 26.3%
- 19.8%
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