Private Markets Cert Practice Questions - CFA Institute Private Markets & Alternative Investments Certificate Exam

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A buyout fund acquires a company for 10x EBITDA, exits five years later at 12x EBITDA, having grown EBITDA by 50% and paid down half the original debt. Which value-creation lever contributed most to the IRR?

Multiple expansion only EBITDA growth only Debt paydown only All three contribute, with EBITDA growth typically the largest

Correct Answer:

All three contribute, with EBITDA growth typically the largest

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