medium · Private Equity paper-lbo
A company is purchased for 10.0× LTM EBITDA. The sponsor uses 6.0× leverage.
If the sponsor targets a 3.0× MoIC over 5 years and expects the exit multiple to remain 10.0×, what must the ending EBITDA be relative to the starting EBITDA (assuming no debt paydown)?
- 1.2×
- 1.8×
- 2.5×
- 3.0×
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