A PE company has an IRR requirement of 20% over a five-year horizon. This means that they are only willing to invest in deals where an LBO model indicates an IRR that is at least 20%. If there is only a single cash flow at entry and a single cash flow at exit, 

How high must the MOIC of an LBO be so that it meet's the fund's IRR requirement? Assume that the investment horizon is five years and give four decimals in the answer.

Answer rating: 100% (QA)

The MOIC Multiple of Invested Capital required to achieve a certain IRR Internal Rat... View the full answer