LBO & Paper LBO
Give the standard MOIC-to-IRR table interviewers expect you to recall for a 5-year hold.
Model answer
Over 5 years: 1.5x ≈ 8.4%, 2.0x ≈ 14.9%, 2.5x ≈ 20.1%, 3.0x ≈ 24.6%, 3.5x ≈ 28.5%, 4.0x ≈ 32.0%. Round in your head to ~8%, ~15%, ~20%,…
The full, human-reviewed answer is in the bank.
Sign up free and Daily 10 serves you 10 questions a day from all 1,500+ — or go Pro for unlimited reps.
More from LBO & Paper LBO
- What is a leveraged buyout?
- What makes a company a good LBO candidate?
- What drives returns in an LBO?
- Why does using more leverage increase equity returns (when it works)?
- At a high level, how do you calculate the IRR or money multiple on an LBO?
- Name the three primary value-creation (returns) drivers in an LBO.