I'm building a football field for a pitch deck that. The MD has asked us to run the LBO row of the football field at 15-25% IRRs. My VP is telling me that I need to run these sensitivities such that there isn't any multiple expansion - am I totally losing it or is this not even possible when you are assuming the ?
My argument is that if you are holding IRR constant, you need to flex either the entry or exit multiple (and thereby introduce the possibility of multiple expansion or compression) to get yourself the target 15/25% return i.e. if you hold both entry and exit multiple constant you just get the IRR as an output rather than an input