If an investment using the value implied by the median EV/EBITDA multiple from the comps is made at the transaction date, what is the implied IRR? Assume the terminal value is the average of the values determined using the perpetual growth rate and an EBITDA exit multiple.

9.55%

8.88%

9.51%

9.12%

Model Inputs and Assumptions General Assumptions Transaction Date Fiscal Year-End Days Per Year 01.01.2020 31.12.2020 365 Current Capitalization Cash-on-Hand PP&E Total Debt Total Equity $10.000 $30.000 $20.000 $60.000 Valuation Assumptions Tax Rate Perpetual Growth Rate EBITDA Exit Multiple 30% 2% 10,0x Risk-Free Rate Equity Risk Premium Interest Rate 5% 4% 6% E F G H M 1 2 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 4 Income Statement 6 7 Sales Revenue Cost of Sales Gross Profit $65.328 ($30.278) $35.050 $68.594 ($33.665) $34.930 $72.024 ($37.586) $34.438 $75.625 ($38.676) $36.950 $79.407 ($35.894) $43.513 $83.377 ($33.010) $50.367 $87.546 ($40.118) $47.428 $91.923 ($41.027) $50.896 $96.519 ($41.380) $55.139 $101.345 ($40.413) $60.932 8 9 10 11 12 SG&A Expense Depreciation Expense Interest Expense Income Before Income Taxes Income Taxes Net Income ($9.799) ($4.875) ($1.200) $19.176 ($5.753) $13.423 ($10.289) ($4.899) ($1.140) $18.601 ($5.580) $13.021 ($10.804) ($4.931) ($1.080) $17.623 ($5.287) $12.336 ($11.344) ($4.970) ($1.080) $19.556 ($5.867) $13.689 ($11.911) ($5.015) ($990) $25.597 ($7.679) $17.918 ($12.507) ($5.065) ($810) $31.986 ($9.596) $22.390 ($13.132) ($5.119) ($720) $28.457 ($8.537) $19.920 ($13.788) ($5.177) ($720) $31.210 ($9.363) $21.847 ($14.478) ($5.239) ($720) $34.702 ($10.411) $24.291 ($15.202) ($5.305) ($660) $39.766 ($11.930) $27.836 13 14 15 16 17 18 20 $30.520 21 22 Balance Sheet Items PP&E Schedule PP&E, Opening Balance Capital Expenditures Depreciation Expense PP&E, Ending Balance $30.000 $5.000 ($4.875) $30.125 $30.125 $5.075 ($4.899) $30.301 $30.301 $5.151 ($4.931) $30.520 $30.779 $5.307 ($5.015) $31.071 $5.228 ($4.970) $30.779 $31.071 $5.386 ($5.065) $31.392 $31.392 $5.467 ($5.119) $31.741 $31.741 $5.549 ($5.177) $32.113 $32.113 $5.632 ($5.239) $32.506 $32.506 $5.717 ($5.305) $32.918 23 24 25 26 27 28 Debt Schedule Total Debt, Opening Balance Issuance (Repayment) Total Debt, Ending Balance Interest Expense $20.000 $0 $20.000 $1.200 $20.000 ($2.000) $18.000 $1.140 $18.000 $0 $18.000 $1.080 $18.000 $0 $18.000 $1.080 $18.000 ($3.000) $15.000 $990 $15.000 ($3.000) $12.000 $810 $12.000 $0 $12.000 $720 $12.000 $0 $12.000 $720 $12.000 $0 $12.000 $720 $12.000 ($2.000) $10.000 $660 29 30 31 32 33 34 Equity Schedule Total Equity, Opening Balance Net Income Dividends Share Issuance (Buy-Back)) Total Equity, Ending Balance $60.000 $13.423 $0 $73.423 $13.021 $0 $0 $86.444 $86.444 $12.336 $0 $98.780 $13.689 $0 $0 $112.469 $112.469 $17.918 $0 $130.387 $22.390 $0 $0 $152.777 $152.777 $19.920 $0 35 $172.697 $21.847 $0 $194.544 $24.291 $0 $0 $218.835 $218.835 $27.836 $0 36 $0 $0 $0 $73.423 $0 $130.387 $0 $172.697 $0 $194.544 37 $98.780 $246.671 38 A B C D E F G H K L M N O P 1 2 4 5 Financial Data (202E) EBITDA EBIT [$] [$] Earnings ($1 EV/Sales [x] Valuation (2020E) EVEBITDA EVIEBIT [x] [x] P/E [x] 6 8 Comparable Trading Metrics Market Data Company Name Price Market Cap [$/sh.] [$] Company A $38 $168.041 Company B $81 $123.883 Company C $52 $10.326 Company D $70 $11.618 Company E $21 $964 Average Median EV [$] $185.122 $143.824 $12.764 $11.004 $968 9 Sales [$] $46.854 $56.415 $3.997 $2.246 $345 10 $14.104 $12.344 $1.319 $706 $88 $11.127 $9.878 $1.103 $584 $66 $7.381 $5.618 $620 $357 $41 11 12 13 14 15 Comparable Companies Beta Levered Company Beta Company A 1,27 Company B 1,31 Company C 1,15 Company D 1,11 Company E 1,38 Median Debt $550 $500 $450 $600 $450 Equity $1.100 $900 $1.200 $1.000 $1.400 Debt / Equity Tax Rate 50,00% 35% 55,56% 30% 37,50% 29% 60,00% 33% 32,14% 30% Unlevered Beta 0,96 0,94 0,91 0,79 1,13 0,94 Model Inputs and Assumptions General Assumptions Transaction Date Fiscal Year-End Days Per Year 01.01.2020 31.12.2020 365 Current Capitalization Cash-on-Hand PP&E Total Debt Total Equity $10.000 $30.000 $20.000 $60.000 Valuation Assumptions Tax Rate Perpetual Growth Rate EBITDA Exit Multiple 30% 2% 10,0x Risk-Free Rate Equity Risk Premium Interest Rate 5% 4% 6% E F G H M 1 2 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 4 Income Statement 6 7 Sales Revenue Cost of Sales Gross Profit $65.328 ($30.278) $35.050 $68.594 ($33.665) $34.930 $72.024 ($37.586) $34.438 $75.625 ($38.676) $36.950 $79.407 ($35.894) $43.513 $83.377 ($33.010) $50.367 $87.546 ($40.118) $47.428 $91.923 ($41.027) $50.896 $96.519 ($41.380) $55.139 $101.345 ($40.413) $60.932 8 9 10 11 12 SG&A Expense Depreciation Expense Interest Expense Income Before Income Taxes Income Taxes Net Income ($9.799) ($4.875) ($1.200) $19.176 ($5.753) $13.423 ($10.289) ($4.899) ($1.140) $18.601 ($5.580) $13.021 ($10.804) ($4.931) ($1.080) $17.623 ($5.287) $12.336 ($11.344) ($4.970) ($1.080) $19.556 ($5.867) $13.689 ($11.911) ($5.015) ($990) $25.597 ($7.679) $17.918 ($12.507) ($5.065) ($810) $31.986 ($9.596) $22.390 ($13.132) ($5.119) ($720) $28.457 ($8.537) $19.920 ($13.788) ($5.177) ($720) $31.210 ($9.363) $21.847 ($14.478) ($5.239) ($720) $34.702 ($10.411) $24.291 ($15.202) ($5.305) ($660) $39.766 ($11.930) $27.836 13 14 15 16 17 18 20 $30.520 21 22 Balance Sheet Items PP&E Schedule PP&E, Opening Balance Capital Expenditures Depreciation Expense PP&E, Ending Balance $30.000 $5.000 ($4.875) $30.125 $30.125 $5.075 ($4.899) $30.301 $30.301 $5.151 ($4.931) $30.520 $30.779 $5.307 ($5.015) $31.071 $5.228 ($4.970) $30.779 $31.071 $5.386 ($5.065) $31.392 $31.392 $5.467 ($5.119) $31.741 $31.741 $5.549 ($5.177) $32.113 $32.113 $5.632 ($5.239) $32.506 $32.506 $5.717 ($5.305) $32.918 23 24 25 26 27 28 Debt Schedule Total Debt, Opening Balance Issuance (Repayment) Total Debt, Ending Balance Interest Expense $20.000 $0 $20.000 $1.200 $20.000 ($2.000) $18.000 $1.140 $18.000 $0 $18.000 $1.080 $18.000 $0 $18.000 $1.080 $18.000 ($3.000) $15.000 $990 $15.000 ($3.000) $12.000 $810 $12.000 $0 $12.000 $720 $12.000 $0 $12.000 $720 $12.000 $0 $12.000 $720 $12.000 ($2.000) $10.000 $660 29 30 31 32 33 34 Equity Schedule Total Equity, Opening Balance Net Income Dividends Share Issuance (Buy-Back)) Total Equity, Ending Balance $60.000 $13.423 $0 $73.423 $13.021 $0 $0 $86.444 $86.444 $12.336 $0 $98.780 $13.689 $0 $0 $112.469 $112.469 $17.918 $0 $130.387 $22.390 $0 $0 $152.777 $152.777 $19.920 $0 35 $172.697 $21.847 $0 $194.544 $24.291 $0 $0 $218.835 $218.835 $27.836 $0 36 $0 $0 $0 $73.423 $0 $130.387 $0 $172.697 $0 $194.544 37 $98.780 $246.671 38 A B C D E F G H K L M N O P 1 2 4 5 Financial Data (202E) EBITDA EBIT [$] [$] Earnings ($1 EV/Sales [x] Valuation (2020E) EVEBITDA EVIEBIT [x] [x] P/E [x] 6 8 Comparable Trading Metrics Market Data Company Name Price Market Cap [$/sh.] [$] Company A $38 $168.041 Company B $81 $123.883 Company C $52 $10.326 Company D $70 $11.618 Company E $21 $964 Average Median EV [$] $185.122 $143.824 $12.764 $11.004 $968 9 Sales [$] $46.854 $56.415 $3.997 $2.246 $345 10 $14.104 $12.344 $1.319 $706 $88 $11.127 $9.878 $1.103 $584 $66 $7.381 $5.618 $620 $357 $41 11 12 13 14 15 Comparable Companies Beta Levered Company Beta Company A 1,27 Company B 1,31 Company C 1,15 Company D 1,11 Company E 1,38 Median Debt $550 $500 $450 $600 $450 Equity $1.100 $900 $1.200 $1.000 $1.400 Debt / Equity Tax Rate 50,00% 35% 55,56% 30% 37,50% 29% 60,00% 33% 32,14% 30% Unlevered Beta 0,96 0,94 0,91 0,79 1,13 0,94