LBO & Paper LBO
An interviewer asks for IRR but you've only computed MOIC and the hold is an odd number like 6 years. How do you respond credibly?
Model answer
State the exact relationship and bracket it: IRR = MOIC^(1/6) - 1. Anchor to known points — 2x/6yr is between 2x/5yr (~15%) and 2x/7yr (~10%), so ~12%. For a 6-year double, Rule of 72…
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