Private Equity
Comprehensive exam-oriented quiz based exactly on the Private Equity T4 2020 exam and solution file.
Question 9 of 14
You work as an analyst at BoomCapital and have to choose between two investment opportunities with the information available in the table below.
| Company A | Company B | |
|---|---|---|
| Revenue | €100M | €100M |
| EBITDA | €20M | €20M |
| Projected annual revenue growth for the next 5 years | 5% p.a. | 10% p.a. |
| Entry Multiple | 7x EBITDA | 8x EBITDA |
| Leverage (entry and exit) | 4x EBITDA | 4x EBITDA |
| Exit Multiple | 7x EBITDA | 8x EBITDA |
All else equal, which company is the better investment opportunity based on the information provided?
Company A
Company B
Do not have sufficient information