hard · Private Equity pe-core
An LBO was closed with a $220M sponsor equity investment. A Management Incentive Plan (MIP) was established for 12% of the fully-diluted equity with a strike price equal to the entry equity value. At exit, the total equity value is $600M.
Using the treasury stock method and assuming 100 fully-diluted shares, what is the net payout to the MIP holders?
- $42.0M
- $72.0M
- $20.0M
- $45.6M
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