medium · Private Equity paper-lbo
Consider an LBO of IndustrialCo where the sponsor, Titan Equity, achieves a 2.0x Multiple of Invested Capital (MoIC) over a 5-year holding period.
Using standard PE conversion rules, which of the following is the most accurate approximation of the money-weighted Internal Rate of Return (IRR)?
- 25.9%
- 14.9%
- 10.4%
- 20.0%
Sign up free to see the explanation and track your rank →
More Private Equity paper-lbo practice
- If net debt remained constant at $200M throughout the hold, what was the primary source of
- If EBITDA remains exactly the same and no debt is paid down, which lever is the sole sourc
- A practitioner is calculating the 'Envy Ratio' in an LBO. If the management team's MoIC is
- What is the approximate internal rate of return (IRR)?
- If the sponsor achieved a 2.18× MoIC, what is the approximate IRR?
- After 4 years, EBITDA has grown to $40.8M and debt has been paid down from $126M to $33.6M
- If the company is sold for 3.0× the total exit equity, what is management's MOIC?
- If EBITDA remained flat at $100M and debt was reduced by $200M, which factor was the large