Question 5 0 / 1 point Assumptions Purchase Price Calculation Options Table Base Year 2005 Revolver 5.096 Basic Shares 370.0 Potentials Strike Include Proceeds Spons or Target IRR 25.0% Senior Debt 2.50x 8:0% Current PPS $20.00 5.0 $15. 00 5.0 $75.0 Exit Mulitple 6.0x Sub Debt 2.00x 10.096 Offer Premium 15.096 40 17.00 68.0 Tax Rate 38.09% Mezzanine 0.00x 12:09% Offer PPS $23:00 3.0 19.00 3:0 57.0 Circular On? Yes FD Shares 373.3 20 25 00 0.0 0.0 Equity Offer Price 58,588 14.0 12.0 $200.0 Sources Mult 9% Total Uses Free Cash Flow 20 06 2007 2008 2009 2010 Senior Debt 8,250 2 5x 42 496 Purchase Equity $8,588 EBITDA $2,700 $2,916 $3, 149 83,40 1 83, 673 Sub Debt 5.000 2 Ox 33.96 Refinance Net Debt 6.000 Less :.CapEx (864) (833) (1,008) (1.088) (1. 176) Mezzanine 0 0. Ox 0.0% Trans action Fees 150 Less: Increase in NWC (40 (43 (47) (50) (54) Spons of Equity 3 488 1. 4 23.7% Less : Cash Interest (980) (837) (883) (819) (742) Total $14.738 5.9% 100.0% Total $14,738 Less : Cash Taxes (325) (398) 478 (568) (687) FCF for Debt Repayment 490 808 734 876 1, 034 MOIC is the multiple of invested capital. It answers the question - what multiple of your investment did you receive during the life of the investment (dividends if any, and proceeds when you exited the investment)? So if you invested $5 of equity and got back $8 your MOIC would be 8/5 or 1.6x. What is the MOIC for the equity sponsor in this LBO at the end of five years (end of 2010) if the exit EBITDA multiple is 6.6x? Assume that the positive cash flows are used to pay down debt and not to pay dividends. Format 12.34x as 12.3 Answer: 4.0 x (4.8)