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Show the answers on an Excel Spreadsheet, otherwise it will be zero. It has to be well organized and clear. Graphs must be precise, clear
Show the answers on an Excel Spreadsheet, otherwise it will be zero.
It has to be well organized and clear. Graphs must be precise, clear and accurate
Calculation of IRR
Assume that a group of sponsors buys a firm for $ billion.
It is financed with debt and equity.
The firm was able to generate $ million a year after interest to pay back the debt.
The sponsor sells the firm in year for $ billion.
What is the IRR of this LBO?
Main Sponsor
Among the sponsors, there is a main sponsor who will turn the acquired firm around.
This main sponsor invested only of the amount invested in equity but gets of the amount of equity at the end.
a What is the IRR for the main sponsor?
b What is the IRR for the group of other sponsors?
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