An LBO transaction requires that a subordinated debt lender provides capital in the amount of $150 million. The lender requires cash interest of 7% per year and will exit at time t = 4. In addition, the lender requires an equity kicker to bring the IRR of his investment to 13%. Assuming that the face value of the subordinated debt at t = 4 is equal to $150 million, calculate the required equity kicker.

Group of answer choices

$43.6 million

$41.2 million

$38.5 million

$33.9 million