Is it possible to have EBITDA growth contributing to 65% of returns, given an EBITDA CAGR of only 9% over five years? Doesnt sound intuitive to me, but I did a financial modeling course and based on their excel formula, the result is as such.
How do you guys compute the returns attribution for EBITDA growth, debt paydown (assume no multiple expansion)?
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Value created from EBITDA growth= (Exit EBITDA-Entry EBITDA)*entry multiple. Value created from debt pay-down=debt at entry-ending balance
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