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IRR decomposition / Attribution in LBO
Dear all, I am currently finishing an LBO model and included an overview of value creation in terms of MOIC (equity value bridge incl. ebitda growth, multiple expansion, debt paydown etc.). So far so good. However, I am getting stuck at the following and would love to hear your input: I am trying to...
internal rate of return vs. "simple rate of return"
Hi there, I'm a practitioner (not in Ibanking) and am cosidering the following (real world) potential investment: Up-front purchase price of investment (a used machine): 14,000 Euros Annual profit of the machine: 1,802 Euros (for 11 years) no residual value after 11 years. Now I want to calculate...
Debt fund returns / IRR
Hello all, I have a presentation from a growth debt fund which invests in senior debt in small early stage companies ($15-30MM tickets). They talk about 15+% gross IRR (YTM) (before carry and management fees). Now, when looking at the investments they have done so far, it always seems to be debt...
IRR vs. Compound Return Rate
Does IRR assume the interim cash flows are reinvested? Various sources say yes and others say no. Investopedia's IRR article says "One of the disadvantages of using IRR is that all cash flows are assumed to be reinvested at the same discount rate". I was also taught this in my Corp Finance class as...
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