LBO & Paper LBO
Quick mental math: you buy at 10x, exit at 10x in 5 years, EBITDA grows 0%, and you enter with 50% leverage that's fully repaid by exit. Roughly what MOIC and IRR?
Model answer
Entry EV = 10 × EBITDA; entry debt = 50% EV, entry equity = 50% EV. If all debt is repaid and EV is unchanged (flat multiple, flat EBITDA), exit equity =…
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