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Private Equity

Exam 1: 2019/20 T3

Comprehensive exam-prep quiz on PE fund structure, PE return measures, LBO candidates, mezzanine financing, return decomposition, debt coverage, IRR, sweet equity, and sources-and-uses. Source:

Question 19 of 22

You buy a company for 8.0x EV/EBITDA. EBITDA is 100 in year 1 and 170 in year 5. Assuming everything else is constant, what exit multiple is needed for at least a 25% IRR?

Write your answer in your own words. It will be graded with Gemini.

Answer freely: concise wording is fine as long as it covers the lecture point.