The RRK buyout fund is considering an investment in a fertilizer distribution center. The stock currently trades at $20 per share with 150,000,000 shares outstanding. RRK offers $25 per share, 80% of which is funded by high-yield debt securities. The fund believes it can work with management to grow the firm at a rate of about 4% while also retiring half of the high-yield debt by an expected exit in year 6, reinvesting any profit in growth and debt reduction. What is the expected IRR of this investment?

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