easy · Private Equity paper-lbo

A candidate is modeling 'Iota Inc.' and assumes the entry and exit multiples are both 8x.

If they increase the entry multiple to 9x but keep the exit multiple at 8x, what happens to the IRR?

  1. The IRR increases.
  2. The IRR decreases.
  3. The IRR remains the same.
  4. The MoIC increases but the IRR stays the same.

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