FS Financial Statements Workbench
← Back to Private Equity

Private Equity

Lecture 3-4: Due Diligence & Equity Structuring

Comprehensive exam-preparation quiz covering the Private Equity ecosystem, LBO fundamentals, value creation drivers, Due Diligence, the Investment Thesis, transaction structuring (Sources & Uses), and management incentive structures.

Question 36 of 43

Sort each description into the correct alternative management incentive mechanism.

Drag each statement into the correct group.

Sort every statement: place all cards into a group, then check your answer.

Statements

4

Drag each statement into the correct group.

Award of shares if and when specific thresholds are achieved

Management obtains a portion of the fund's return above a specific IRR hurdle, e.g. 50% over a 25% IRR

Remuneration that mirrors the returns shares would have earned; main disadvantage is the tax treatment

Extra equity for management when PE returns exceed a specific threshold

Ratchet

0

Drop matching statements here.

Drop statements here

Shadow shares

0

Drop matching statements here.

Drop statements here

Stock options

0

Drop matching statements here.

Drop statements here

Share of return over hurdle

0

Drop matching statements here.

Drop statements here