Private Equity & Exit Opps
A sponsor does a dividend recap in year 2 of a 5-year hold. What happens to IRR vs. MOIC, and why?
Model answer
IRR improves; MOIC is roughly unchanged (and can even slip). MOIC counts total dollars out over dollars in, so shifting $200 of proceeds from the year-5 exit to a year-2 dividend doesn't change the…
The full, human-reviewed answer is in the bank.
Sign up free and Daily 10 serves you 10 questions a day from all 2,000+ — or go Pro for unlimited reps.
More from Private Equity & Exit Opps
- At a high level, how does private equity recruiting differ from investment banking recruiting?
- What's the difference between on-cycle and off-cycle PE recruiting?
- Should an IB analyst go on-cycle or wait for off-cycle? What are the real trade-offs?
- What role do headhunters actually play in PE recruiting, and why are they called gatekeepers?
- How should you prepare for and handle the headhunter intro call?
- What should you tell headhunters about your fund preferences — and why does consistency matter so much?