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Private Equity

Lecture 9 - 10: LBO Model, EV to Equity and Exit

Comprehensive quiz covering LBO model construction, types of EBITDA, value creation strategies, the EV-to-Equity bridge, net debt and working capital adjustments, completion mechanisms (locked box vs. completion accounts), governance, and exit routes.

Question 46 of 52

What does it potentially signal if an analyst assumes a reduction in the multiple at exit?

Pick one: press 1-4 on your keyboard or click an option.
A

It means multiple arbitrage has definitely been achieved

B

It always means the investment thesis is wrong

C

It might mean you overpaid, that the market/asset is becoming less attractive, or simply that you are being conservative

D

It guarantees a higher return on a risk-adjusted basis