How to answer this technical I was asked at MM firm??
Had no idea how to answer and was stumped. My page was filled with numbers haha but I don't see how this is even possible without a calculator.
A PE firm buys a company for $500 with $300 debt and $200 equity. Tax rate is 50%. All LFCF goes to debt paydown. LFCFs are $90, $100, and $110. Exit EV is $500. An associate discovers SG&A was understated by the same fixed amount each year. After correction, MOIC drops from 2.5x to 2.2x. By how much was SG&A understated per year?
Anyone have any idea how to answer this without breaking out Excel??
Magnam officia nihil consequatur rerum. Sit voluptatem veniam voluptas atque vero consequatur corporis. Quam at laborum at tempore aut.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...