LBO & Paper LBO
Memorize the IRR for a 3.0x MOIC over a 5-year hold.
Model answer
IRR = 3.0^(1/5) - 1 ≈ 24.6%, call it ~25%. Useful companion anchors over 5 years: 2.0x ≈ 15%, 2.5x ≈ 20%, 3.0x ≈ 25%, 4.0x ≈ 32%. These let you sanity-check a paper LBO answer instantly: if you…
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