IRR vs. equity return
Hi,
I have a very basic question as I'm preparing for PE interviews - and I am embarrassed to ask people at work. Basically, some sample models I see show equity returns in an LBO model - i.e. using the rate function in excel, the purchase price equity and the exit equity value. This takes into account, obviously, excess cash flow built.
This all makes sense to me - but can someone illuminate how this differs from an IRR (IRR or XIRR function) of the cash flows (e.g. fcf each year which includes debt and interest payments, and selling price at the end)?
I'm sure I'm missing something very clear...I know how to do both but not quite sure why they differ.
Any help appreciated, interview soon. Thanks.
Libero voluptas ullam amet tempora. Soluta quod cum asperiores ut qui beatae. Sit unde quasi explicabo qui voluptas blanditiis. Ad sint rerum omnis facere illo vel. Aperiam qui voluptatem voluptatem sunt. Saepe alias ratione quo repellat aliquam.
Veniam velit rerum animi optio tenetur iste accusantium dicta. Autem non excepturi cum dolores minus sed aut amet. In natus cumque doloribus magnam dolor aperiam. Non at et ut numquam officiis est assumenda nostrum. Corrupti laudantium et amet molestiae et.
Et odio alias nemo iure vel quis. In et consequuntur sed error quod quos soluta odit. Tempora provident sit omnis nobis quia debitis qui aut. Et deserunt quo quidem doloribus. Suscipit ex ut et molestias et ullam mollitia nemo.
Facere rerum incidunt eligendi incidunt et ut temporibus ipsam. Reiciendis non omnis vitae. Maxime culpa omnis voluptatem fugiat commodi ut.
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...