High-level Waterfall / IRR Hurdle Question
It's been years since I made a waterfall and now I'm stuck on a specific formula. I want to know if a formula exists to determine the proceeds required in an exit year to achieve a specific IRR.
Using a 5 year hold for example and a 10.00% IRR hurdle, I basically just took (1+10.00%)^5 to determine what multiple is required (1.61x). I then applied that multiple to the Year 0 equity contribution, then subtracted whatever distributions where made in Years 1-4. However, the resulting Year 5 required proceeds yields a 10.53% IRR, not a 10.00% IRR, presumable because the cash flow distributions in Years1-4 are not consistent, they vary.
Is it possible to run a formula like this without using goalseek?
Minus assumenda deserunt impedit consequatur dolorem. Nostrum blanditiis placeat aspernatur et et quia dicta sapiente. Aut vitae fugiat eum molestiae et. Ex quam et recusandae nobis nihil aperiam qui.
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...